It is reported that the two biggest South Korean customers for BHP Billiton's iron ore, POSCO and Hyundai Steel said that they do not approve of its merger plans with Rio Tinto.

The report cited Mr Kwon Young-Tae executive VP who is responsible for iron ore purchasing of POSCO official as saying that "As the BHP Rio Tinto merger may lead to a monopoly in the raw materials market, POSCO is concerned about the deal.”

A Hyundai Steel executive told Dow Jones Newswires "If BHP's takeover bid ends successfully the integrated entity will no doubt have a greater bargaining power when it negotiates with its clients.”

Mr Marius Kloppers CEO of BHP Billiton visited Seoul Tuesday to meet with top POSCO and Hyundai Steel executives, after visiting Japan on Monday, left for China after meeting clients in Seoul.

BHP, Rio Tinto, CVRD and Canada's EVCC will together supply Hyundai Steel with 15 million tonnes of iron ore and 6 million tonnes of soft coal, almost 100% of what the steelmaker needs in the new plant.

POSCO relies on BHP, Rio Tinto and CVRD for about 75% of its iron ore imports.