SYDNEY- German regulators are planning to block a $120 billion iron ore venture between mining giants Rio Tinto and BHP Billiton Ltd. in Australia, the companies said Friday.
In a statement, Rio Tinto and BHP said they were disappointed that the German Federal Cartel Office has signaled it will prohibit the joint production venture in Western Australia state's remote Pilbara region. The companies said they expect to receive a formal notification from the German regulator next week.
"The parties continue to believe that the joint venture is pro-competitive and will increase the supply of iron ore," the statement said. "However, both BHP Billiton and Rio Tinto acknowledge the concerns expressed by some regulators and the obstacles to achieving clearance for the joint venture."
BHP and Rio Tinto plan to save at least $10 billion by combining their operations in the Pilbara region.
The German antitrust agency is one of several panels investigating the proposed deal, which requires the approval of a slew of regulators from Australia to Asia to Europe. The European Commission announced in January that it was examining whether the joint venture would break European Union antitrust rules.
In August, Rio Tinto's CEO Tom Albanese dismissed reports that the deal was on the verge of collapse over concerns from regulators that the partnership would give the miners too much influence over prices.
The companies said they had not yet made any decisions about their next steps.
Raymond Zhou
Op Rana
Berlin Fang
Zhu Yuan
Huang Xiangyang
Chen Weihua