European Commission opens cartel investigation against joint venture of BHP Billiton and Rio Tinto

“We very much welcome the decision of the Commission”, said Gordon Moffat, EUROFER director general. “We remain convinced that the joint venture would be an unacceptable concentration which will significantly restrict competition in the seaborne iron ore market.”

EUROFER maintains its view that the effect of the JV on the global iron ore market would not be materially different from the full merger which had been proposed in 2008. The resulting restriction in competition moving from a position of market dominance of three companies to only two will substantially reduce the consumer choice of supplier. It effectively creates a duopoly with the iron ore market for the entire world in the hands of just two companies.

BHP Billiton and Rio Tinto have market shares of seaborne iron ore of 17 % and 19 % respectively, while Vale, the third mining giant, controls 33 % (2008).

Article 101 TFEU “prohibits as incompatible with the internal market all agreements between undertakings, decisions by associations of undertakings and concerted practise which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market”.

Represented by EUROFER, the European steel industry is the world leader in its sector with a turnover of EUR 190 billion and direct employment of 420 thousand people, producing 200 million tonnes of steel per year.

Contact

Gordon Moffat, Director General +32 2 738 79 26 (g.moffat@eurofer.be)

Axel Eggert, Director Public Affairs +32 2 738 79 34 (a.eggert@eurofer.be)