BHP and Rio give up on iron ore collaboration

18th Oct 2010 07:07

Mining giants BHP Billiton and Rio Tinto have confirmed that their proposed iron ore joint venture is dead in the water.The companies had agreed in December of last year to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets, but the hook-up has run into regulatory opposition, prompting the companies to abandon the idea.Both parties have recently been advised that the proposal would not be approved in its current form by the European Commission, Australian Competition and Consumer Commission, Japan Fair Trade Commission, Korea Fair Trade Commission or the German Federal Cartel Office."It has become clear that this transaction is unlikely to obtain the necessary approvals to allow the deal to close and as a result both parties have reluctantly agreed to terminate the agreement," said Marius Kloppers, chief executive officer of BHP Billiton."Both companies have worked hard together over the last 16 months in a positive spirit to demonstrate its pro-competitive effects and I am disappointed that ultimately the regulators did not agree with us," said chief executive officer of Rio Tinto, Tom Albanese.The statement from Rio said that some regulatory bodies had required actions by both parties, including divestments, that were unacceptable to either BHP, Rio or both, while others had indicated they would prohibit the joint venture outright.The parties have mutually agreed that no break fee is payable.