The European Commission has announced to open an investigation according to Article 101 of the Treaty on the Functioning of the European Union on the impact on the common market by the proposed JV between mining companies BHP Billiton and Rio Tinto.

Mr Gordon Moffat director general of EUROFER said that "We very much welcome the decision of the Commission. We remain convinced that the joint venture would be an unacceptable concentration which will significantly restrict competition in the seaborne iron ore market."

EUROFER maintains its view that the effect of the JV on the global iron ore market would not be materially different from the full merger which had been proposed in 2008. The resulting restriction in competition moving from a position of market dominance of three companies to only two will substantially reduce the consumer choice of supplier. It effectively creates a duopoly with the iron ore market for the entire world in the hands of just two companies.

BHP Billiton and Rio Tinto have market shares of seaborne iron ore of 17% and 19% respectively, while Vale, the third mining giant, controls 33% in 2008.

Article 101 TFEU prohibits as incompatible with the internal market all agreements between undertakings, decisions by associations of undertakings and concerted practice which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market.