Japan Iron and Steel Federation has come out in open against BHPB’s move to merge with Rio Tinto. Japan is one of the world's largest consumer of raw materials, but the resource poor country relies almost entirely on imports.

Mr Hajime Bada chairman of the Japan Iron and Steel Federation told a news conference that a melding of two of the largest raw materials suppliers, BHP Billiton PLC and Rio Tinto PLC, is undesirable for industrial competition and pricing.

The report quoted a JISF spokesperson citing Mr Bada as saying that “We are afraid that a healthy pricing mechanism would be lost under their market dominance through a merger.”

After a takeover, 60% of Japan's raw materials imports would have to come from the two companies, the spokesman said. He said “This would be a major setback for the Japanese industry.”

Mr Bada said he would convey the message when he holds talks as president of JFE Steel Corp with Mr Marius Kloppers CEO of BHP Billiton , currently in Japan to meet with industry leaders and clients. Mr. Kloppers is also scheduled to visit business leaders and clients in China and South Korea before returning to Australia.

Japan Iron and Steel Federation is comprised of 61 manufacturers, 60 trading companies and six industry groups.