TOKYO (AFP)--Japanese steelmakers plan to ask regulators to
probe a joint iron ore project between mining giants Rio Tinto
(RIO.AU) and BHP Billiton (BHP.AU), an industry official said
Wednesday.
The controversial joint venture agreement concerns iron ore
operations in the Pilbara region of Western Australia, a deal
expected to save the firms at least US$10 billion.
The Japan Iron and Steel Federation (JISF), led by the world's
number two steelmaker Nippon Steel, is considering a request to
competition authorities to investigate and rule against the joint
venture.
The deal "invites an oligopoly, which would infringe anti-trust
laws, so we are considering asking the (Japan) Fair Trade
Commission (FTC) for an investigation," said JISF official Yukihiro
Murakami.
Europe's steel industry has already launched a request with its
competition authorities, arguing that the merger in a world already
dominated by just three suppliers of iron ore is against the
interests of the market and the industry.
JISF chairman and Nippon Steel president Shoji Muneoka said in a
statement: "According to Rio Tinto and BHP Billiton, the
establishment of the joint venture will require approval of
relevant anti-trust regulators.
"We therefore believe that any decision by the Japan FTC will be
a very important factor."
The Western Australia deal means assets in the vast region will
be shared equally between the two companies, and involves BHP
handing over US$5.8 billion in return for Rio equity.
The deal was announced as Rio pulled out of a proposed US$19.5
billion tie-up with China's Chinalco earlier this month.
Chinese steelmakers on Wednesday said they oppose the deal,
saying it had a "strong monopolistic tint".