The European Commission (EC) has started investigations concerning BHP Billiton and Rio Tinto’s proposed merger of iron ore operations in the Pilbara region of Western Australia.
Formal objections against the proposed merger will be lodged by major steel industry bodies following the initiation of the probe.
Major mining and steelmakers say they see the EC probe as one of the most significant competition reviews expected from Australia, Japan and China.
European, Japanese and Chinese steelmakers have objected to the deal as it could help the two companies gain more control over seaborne iron ore trade.
In the past, the EC had voiced its dissent against the merger of both companies’ iron ore operations.
BHP and Rio said the new joint venture proposal is different from the earlier merger proposal that was rejected by the EC in 2008 as it was a production-only joint venture that did not involve merger of iron ore marketing operations.
The EC has not yet set a deadline for the investigation, which will probe whether the merger breaches EU antitrust laws prohibiting restrictive business practices.