Rio/BHP Billiton face EU probe over Pilbara

25th Jan 2010 12:46

Rio Tinto and BHP Billiton face a new probe into their Pilbara iron ore joint venture in Western Australia after the European Commission said it wants to examine whether it gives the pair a dominant position in the seaborne iron ore market.The European Commission said that Rio Tinto and BHP Billiton were, respectively, the second and third-largest producers of iron ore in the world and the deal to merge their Australian operations comes at a time when worldwide consumption of iron ore was picking up after a slowdown.Rio and BHP have vowed to keep their iron ore marketing operations separate to offset competition concerns, but the plan has been widely criticised by steel groups even so.China, one of the biggest consumers of Pilbara's output, has been especially critical while the World Steel Association and Eurofer, the European steelmakers' lobbying group, have both expressed concerns.The deal, which could mean $10bn in cost savings, is awaiting approval from the Australian regulator.