London, England — MININGREVIEW.COM — 18 October 2010 – Leading international mining groups Rio Tinto and BHP Billiton have decided to end plans for an iron ore production joint venture in the Pilbara in Western Australia, following extensive discussions with regulators.
Revealing this in a statement issued here, Rio Tinto said both parties had recently been advised that the proposal would not be approved in its current form by the European Commission, the Australian Competition and Consumer Commission, the Japan Fair Trade Commission, the Korea Fair Trade Commission, or the German Federal Cartel Office.
The statement added that some regulators had indicated that they would require substantial remedies that would be unacceptable to both parties, including divestments, whereas others had indicated that they would be likely to prohibit the transaction outright. The parties had mutually agreed that no break fee was payable.
Rio Tinto chief executive Tom Albanese said: “The full value of the synergies on offer from a 50:50 joint venture was a prize well worth pursuing. Both companies have worked hard together over the last 16 months in a positive spirit to demonstrate its pro-competitive effects, and I am disappointed that ultimately the regulators did not agree with us,” he added.
“Rio Tinto has exceptional operating assets and expansion potential in the Pilbara and we are already pushing ahead with a major development programme. We also have a range of very attractive growth options across all of our product groups, with investment of more than US$13 billion (R90 billion) in capital projects planned over the 18 months to December 2011,” said Albanese.