BHP asks Brussels to bless Rio bid

May 31, 2008

May 31 (Guardian) – BHP Billiton formally asked the European commission yesterday to approve its $180bn (£90bn) bid for rival mining group Rio Tinto.

Rio Tinto has already rejected the offer, which was announced in February, and BHP’s plans face strong opposition from Europe’s steel producers.

A combination of BHP and Rio Tinto would control a third of the world’s seaborne trade in iron ore and steel-makers are worried that a merged group would unduly influence prices.

Gordon Moffat, head of the steel industry body Eurofer, said: “We cannot believe that the commission will authorise the merger of two of the three mining companies which are dominating almost 75%of the world market for seaborne iron ore. This is not in the interest of the European steel industry.”

The other leading player in the seaborne iron-ore sector is Companhia Vale do Rio Doce.

Despite the merger of the world’s top two steel-makers, Mittal and Arcelor, the global steel industry remains fragmented and producers are concerned that they do not have the scale to match that of the mining companies on which they depend for their raw materials.

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