World steel industry repeats call for iron ore competition review
08 Dec 2009Steel industry believes competition must be preserved in the iron ore market
Brussels - The World Steel Association (worldsteel) calls for competition authorities to thoroughly examine the impact of the proposed joint venture (JV) between Rio Tinto and BHP Billiton.
Speaking on behalf of steel producers worldwide, worldsteel Director General Ian Christmas said: “The recently signed binding agreement between Rio Tinto and BHP Billiton is not materially different from the proposal issued earlier this year. It still carries a great danger of restricting competition thus reducing consumers’ choice as it would create an entity whose controlling position in the world’s seaborne iron ore market would become even less fair than the unsatisfactory position that exists today. The proposed JV would simply turn an oligopoly of three players into a duopoly.”
Continuing, Ian Christmas said: “Competition makes a market strong and brings efficiency. Competition between steel companies has made the global steel market healthier and brought benefits for steel customers. As a result, this has promoted growth in steel use which serves society as a whole. We view this revised proposed JV as potentially extremely harmful to the market, and we call for a very careful review by all the relevant competition authorities.”
Shares of Seaborne Iron Ore Market, %
2006
2007
2008
Vale
36.1
36.1
32.8
Rio Tinto
19.0
19.3
18.6
BHP Billiton
14.2
13.8
17.1
Total
69.3
69.2
68.5
Source for market shares: Raw Materials Group quoted in UNCTAD Trust Fund on Iron Ore Information "Iron Ore Market 2008-2010", Geneva, June 2009
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Notes to Editors:- The World Steel Association (worldsteel) is one of the largest and most dynamic industry associations in the world. worldsteel represents approximately 180 steel producers (including 19 of the world's 20 largest steel companies), national and regional steel industry associations, and steel research institutes. worldsteel members produce around 85% of the world's steel.
- Vale controls virtually the whole of the Brazilian iron ore export industry. A JV of BHP Billiton and Rio Tinto’s Western Australia iron ore interests would similarly control Australian iron ore exports.
- A consequence of allowing BHP Billiton and Rio Tinto to merge their Western Australia iron ore interests into a JV, would result in almost 70% of world seaborne iron ore exports being controlled by the new JV and Vale.
