China may review Rio/BHP "monopoly"

17th Jun 2009 12:55

China has warned Rio Tinto and BHP Billiton that merging their Pilbara, Australia iron ore operations has "a strong monopolistic flavour".BHP-Rio together would account for 80% of Australia's exports of the ore, the Chinese Ministry of Commerce spokesman said this week. China is a huge importer of iron ore."The potential deal has an obvious colour of monopoly. The joint venture is likely to have a big impact on the Chinese steel industry as China is the world's biggest iron ore importer," said Chen Yanhai, an official from the Ministry of Industry and Information Technology (MIIT)."The deal should be subject to Chinese anti-monopoly law," Chen, the head of the raw material department of MIIT, added.Rio Tinto scrapped a proposed $19.5bn financing deal with Chinese aluminium Chinalco two weeks ago and instead launched a $15.2bn rights issue and the iron ore joint venture with BHP.BHP and Rio would be discussing the potential regulatory issues with Chinese officials, BHP told reporters.Last year BHP Billiton's revenue in China was $11.7bn, while Rio Tinto's generated $10.8bn.