The European Commission has issued its statement of objections to BHP Billiton's proposed USD 79.5 billion hostile takeover of mining rival Rio Tinto, with the main competition barriers thought to be in the iron ore market.

Neither BHP nor the European Commission made any official comment on the content of the statement. Details are expected to emerge in the coming week, after an edited version is circulated to interested parties, such as the steelmakers who are BHP and Rio's customers.

The main objections to the proposed deal are likely to be in the iron ore market. When the Commission opened its in-depth inquiry into BHP's proposed takeover, it said a merged company would hold "a significant share of iron ore supplies and that its share, plus that of its next competitor, would amount to a very large part of iron ore supplies.

The Commission has also expressed concerns that the proposed deal would reinforce BHP's leading position in metallurgical coal.