A new alliance between Rio Tinto PLC (RTP) and BHP Billiton Ltd. (BHP) can't yet be called a "new monopoly" in the iron ore market, a senior Chinese steel industry official said Friday, but warned anti-monopoly measures were available if monopolistic tendencies began to show.

"At this point, it's merely a joint venture," said Zou Jian, executive director of the Chinese Iron and Steel Association.

"We can't call it a new monopoly yet. But if it does become a new monopoly, there will be anti-monopoly measures available to deal with it."

Rio Tinto is entering into a 50-50 iron ore joint venture with BHP that spells the end of its planned US$19.5 billion alliance with Aluminum Corp. of China, or Chinalco.

The association, for now, doesn't believe the Rio-BHP alliance would affect 2009 iron ore term price talks, still ongoing between global miners and Chinese steel mills.

"I don't believe there will be much effect on China on the iron ore price, because China's too big of a market," Zou said. "That in itself is an advantage."

China's Ministry of Commerce said it was still coordinating with its departments for an official response, and had no official response Friday morning.

But steel analysts said they felt the Rio-BHP joint venture would threaten to create a greater degree of monopoly in the iron ore supply market.

The Rio-BHP alliance would clearly pose a bigger threat of a monopoly than just an iron ore supply landscape that, for the Chinese, until now comprises three major miners: BHP, Rio Tinto and Brazil's Vale S.A. (VALE), said Ma Haitian, a senior steel analyst at state-owned metals consultancy Antaike.

"The big three miners on their own were already pretty monopolistic, and in past years it's worked to their advantage," said Yu Liangui, a senior analyst for top Chinese metals consultancy Mysteel. "With the BHP-Rio joint venture, that will be even more of the case. It'll be difficult to break this monopoly."

Yu said the Rio-BHP development narrows China's already dwindling options on this year's term price talks.

"China still had hopes that they could could negotiate with three miners," he said. "Now it will be as if there were just two. Things are getting more difficult for China."

-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848; chuin-wei.yap@dowjones.com