[QODLink]
Business
Mining firms end joint-venture bid
Rio Tinto and BHP Billiton scrap iron-ore project in Western Australia after opposition from regulators.
Last Modified: 18 Oct 2010 11:29 GMT
Firms would have to spend millions of dollars on infrastructure to facilitate mining in remote regions in Australia [EPA]

Rio Tinto and BHP Billiton, two of the world's three biggest mining firms, have discarded a plan for a joint iron-ore venture in Western Australia after regulators in Australia, Europe and Asia held up the move.

The decision on the planned project in the remote outback Pilbara region was announced on Monday after facing anti-competition accusations from Chinese clients as well as regulators.

The two Anglo-Australian firms said that they were disappointed at the breakdown of the deal, worth $120 billion and which was expected to save a total of $10 billion in shared costs.

"The large synergies from combining our West Australian iron ore assets with Rio Tinto's have caused us to persevere in seeking to obtain regulatory approvals," Marius Kloppers, BHP's chief executive, said.

"However, it has become clear that this transaction is unlikely to obtain the necessary approvals to allow the deal to close and as a result both parties have reluctantly agreed to terminate the agreement."

The European Commission, Australia, Japan, South Korea and Germany had all refused to approve the deal, according to Rio Tinto. The move was also strongly opposed by industrial powers in China, the world's leading iron ore consumer.

"Some regulators have indicated they would require substantial remedies that would be unacceptable to both parties, including divestments, whereas others have indicated they would be likely to prohibit the transaction outright," Rio Tinto said in a statement.

Some regulators refused the deal outright while others wanted changes made to it which were unacceptable to the two firms.

Pilbara is rich in mineral wealth, but its remote location means that companies have to spend millions of dollars on infrastructure to serve working there.

Source:
Agencies
Topics in this article
People
Country
Organisation
Featured on Al Jazeera
'Justice for All' demonstrations swell across the US over the deaths of African Americans in police encounters.
Six former Guantanamo detainees are now free in Uruguay with some hailing the decision to grant them asylum.
Disproportionately high number of Aboriginal people in prison highlights inequality and marginalisation, critics say.
Nearly half of Canadians have suffered inappropriate advances on the job - and the political arena is no exception.
Featured
Women's rights activists are demanding change after Hanna Lalango, 16, was gang-raped on a bus and left for dead.
Buried in Sweden's northern forest, Sorsele has welcomed many unaccompanied kids who help stabilise a town exodus.
A look at the changing face of North Korea, three years after the death of 'Dear Leader'.
While some fear a Muslim backlash after café killings, solidarity instead appears to be the order of the day.
Victims spared by the deadly disease are reporting blindness and other unexpected post-Ebola health issues.