Rio Tinto Ltd. (RTP) said Tuesday there is a risk it and BHP Billiton Ltd. (BHP.AU) could be forced to sell some assets to win approval from regulators for their planned iron ore joint venture in the Pilbara region of Western Australia.

In a section of the offer document for its US$15.2 billion rights issue outlining potential risks, Rio said the joint venture with BHP is subject to approval by competition regulators in Australia and European and that winning approvals could require asset sales.

"Rio Tinto and/or BHP Billiton may be required to divest, or commit to divesting, businesses and/or assets to third parties and/or to make other commitments or concessions to the regulatory authorities which may make the transaction less financially and operationally attractive," Rio said in the document.

Rio also noted that some of the US$10 billion in synergies the pair are targeting from the joint venture will depend on winning the cooperation of existing joint venture partners at the iron ore operations.

Also in the rights issue document, Rio said it remains in talks with Chinese steelmakers over contract iron ore prices, after agreeing cuts to prices of between 33% and 44% with Japanese and Korean steel mills.

"The outcome of those negotiations is uncertain and could have a material impact on the group's profitability during the 2009-10 contract period," Rio said.

The miner reaffirmed its guidance for iron ore production, on a 100% basis, of 200 million metric tons in 2009, based on an expected recovery in Chinese steel demand in the second half.

Rio has announced production curtailments in its aluminum division in response to falling prices and said it now expects full year aluminum output to fall 6% on year to 3.8 million metric tons.

The miner also said its 2009 alumina production rate is expected to fall 6% on year and that its bauxite output for the year is expected to be about 32 million metric tons.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com