Japan Steel Industry to Help Authority’s Check on BHP/Rio JV

Mr. Eiji Hayashida, chairman of Japan Iron and Steel Federation commented on Thursday JISF welcomed Japan Fair Trade Commission started the first examination on proposed joint venture of BHP Billiton and Rio Tinto to produce iron ore in Western Australia. JISF requested JFTC thorough investigation and full cooperation with the proceedings.

JFTC announced the start of the first examination of the JV at a press conference held on Wednesday. JISF views the establishment of the JV as a move that would restrict competition just as the failed acquisition of Rio Tinto by BHP Billiton would have.

On the other hand, the two firms emphasize the advantage to the iron ore consumers including 1 trillion yen level of synergy and the improvement of production efficiency.

The world steel industry sees iron ore 3 major suppliers including Vale of Brazil already have strong pricing power when they have around 70% share in world seaborne trade market. World steel makers strongly oppose the establishment of the JV when the steel industry concerns the JV would control Pacific market while Vale already dominates Atlantic market.