A planned iron ore joint venture between BHP Billiton and Rio Tinto looked set to be opposed by European regulators after Germany said it would ban the USD 116 billion deal.

Analyst Dominic O'Kane at Liberum Capital in London said that "What is quite clear is that it is almost inconceivable that the German cartel office, the most significant industrial nation in Europe, could block the deal and yet it would still be approved by the EU.”

EU regulators, deemed as the biggest hurdle to approval of the venture, are set to say the merger could hurt competition, a source familiar with the case said

The statement from the German Federal Cartel Office said it would prohibit the planned merger of the Western Australian operations of the world's second and third biggest miners of the raw material for steel.

Rio and BHP said they had not lost hope for pushing through the deal, which they had hoped would result in USD 10 billion in cost savings by combining infrastructure in Australia's Pilbara region.

(Sourced from www.nationalpost.com)