BHP Billiton-Rio Tinto merger worries European and Asian steel makers

Archiv – The European steel makers have joined the opposition to the proposed merger between the world’s two leading mining group BHP Billiton and Rio Tinto, a deal arousing concerns over their combined market power over iron ore. Global | The European steel makers have joined the opposition to the proposed merger between the world’s two leading mining group BHP Billiton and Rio Tinto, a deal arousing concerns over their combined market power over iron ore.
’It cannot be in the interest of steel makers nor in the interest of consumers that in the future two mining companies control almost three quarters of the world’s iron ore market,’ says Gordon Moffat, Director General of the European Confederation of Iron and Steel Industries, or Eurofer. Asian steel makers, which rely on imports of iron ore, had already voiced strong concerns about the proposed deal.
Australia’s BHP Billiton, the world’s largest mining company, is proposing to buy its rival Britain’s Rio Tinto, the world’s number three miner, for more than 120 billion U.S. dollars.
Eurofer said the mega merger would give the combined company a market share of almost 40 percent of the global iron ore market, reducing the number of world major suppliers from three to two. The other is Brazil’s CVRD, which already has a market share of more than 33 percent.
’Such market domination limits access to raw materials and leaves little room for negotiations on price. Competition in these circumstances is theoretical not a reality,’ Moffat adds.
Eurofer say it is asking the European Commission, the European Union antitrust watchdog, to investigate and to oppose BHP Billiton’s efforts to take over Rio Tinto.