BHP Rio Tinto Iron Ore JV Dead

The proposed joint venture between BHP Billiton and Rio Tinto has finally been laid to rest in the face of regulatory opposition coming in from Europe and Asia. The joint venture located in Western Australia would have created the world's largest iron ore exporter.

The two mining giants have had to scrap the $116 billion iron ore project as it had become increasingly apparent that regulatory approvals of the joint venture were unlikely to be achieved. Melbourne based BHP Billiton issues a statement to this effect yesterday and London based Rio Tinto confirmed the fact in a separate statement.

Both the companies were keen on the joint venture which would have saved them $10 billion in operational costs as they combined mines, railroads and ports in the Pilbara region. The deal had been proposed more than 16 months ago, but has not been well received by the regulatory bodies concerned.

Rio Tinto's Chief Executive Officer, 53 year old Tom Albanese said that the full value of the synergies on offer from a 50-50 joint venture was a prize well worth pursuing. However some regulators wanted substantial remedies which were unacceptable.

Both the companies have been advised that their plans to combine their Pilbara operations albeit market the production separately 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.

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