FT reported that BHP Billiton will outline in the next two weeks which iron ore mines it could sell or spin off to win European Commission approval for its USD 62 billion hostile takeover of rival Rio Tinto.

An edited version of the European Commission’s statement of objections to the deal was received earlier by companies that contributed to the Commission’s investigation, including Rio Tinto and leading steel companies.

Meanwhile the 300 page document was still being digested by the companies, but it was understood to outline the Commission’s objections on competitive grounds, focusing on BHP and Rio’s leading positions in iron ore and also the coking coal market.

Another complication for BHP is the weakening demand for iron ore, which would normally lead to cuts in production, as seen at Rio and Vale of Brazil. But BHP is reluctant to cut its iron ore output as this would undermine its argument that a combination with Rio would lead to more iron ore coming on to the market.

BHP and Rio’s dominance of the Australian iron ore industry means the European Union’s competition regulators are likely to demand some asset disposals as a condition of approving the proposed deal.