The Japan Iron & Steel Federation released a statement on Monday reiterating its opposition to the potential merger of resources giants BHP Billiton and Rio Rinto, ahead of the launch of a study by the European regulatory body on the issue.

The statement said that the federation learned last Friday that BHP Billiton plans to apply for approval of the European competition regulatory body for its proposed merger with Rio Tinto.

The statement said that "Since BHP's announcement to merge with Rio Tinto last November, we have expressed our opposition and this stance has not changed, as we believe the merger will prevent healthy competition in the seaborne trade of iron ore and coking coal.”

Mr Masaki Ishikawa director of steel at Japanese ministry of economy, trade and industry told Platts that if an official merger application was filed, Japanese fair trade commission would look into the issue in detail. He added that although there is little the Japanese fair trade commission can do outside of Japan, the Japanese steel federation is urging the Japanese competition watchdog to provide data to its overseas counterparts.

European steelmakers appear to share the Japanese industry's concerns over consolidation in the mining sector. The European Commission should dismiss BHP Billiton's competition filing for its proposed acquisition of Rio Tinto. On April 7, the Japanese steel federation met in Tokyo with Mr Roelof Plijter advisor on industry for the EC directorate general for trade and officials of ArcelorMittal, Corus, Dillinger Hutte and the European Confederation of Iron and Steel Industries.