IRON AND STEEL

ESTIMATED $10BN IN COST SAVINGS

Australian regulator wants more time to review Rio/BHP JV

Australia's competition regulator has asked for additional information before it makes a decision on whether or not the proposed $116bn iron ore joint venture may go ahead

Posted: Friday , 19 Feb 2010

SYDNEY (Reuters) -

Australia's competition regulator wants more time to review a proposed $116 billion iron ore joint venture between Rio Tinto Ltd/Plc (RIO.AX) and BHP Billiton Ltd/Plc (BHP.AX)(BLT.L), requesting additional information.

Clearance by the Australian Competition and Consumer Commission (ACCC) is one of several anti-competition approvals needed before the partnership can proceed.

BHP and Rio want to combine their iron ore businesses in Australia to streamline mining and shipping activities, estimating it could mean $10 billion in cost savings.

The ACCC started its review on Dec. 9 and was scheduled to announce its findings on Feb. 24, before this week suspending the timeline, saying on its website it needed more information from the mining firms.

A new date has not yet been set by the ACCC, it said.

BHP and Rio declined to comment.

While the ACCC has the authority to contest the merger as anti-competitive, analysts said this was unlikely given almost all the ore is exported overseas.

Rio and BHP face a bigger hurdle winning approval from regulators in Europe and China. Steelmakers there oppose allowing the world's No.2 and No.3 iron ore miners to link their production, fearing it would monopolise Australian exports and control pricing.

The combined annual output would immediately rise to more than 350 million tonnes and overtake Brazil's Vale (VALE5.SA), the top producer. (Reporting by James Regan; Editing by Jeremy Laurence)

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