Mining firms end joint-venture bid

Rio Tinto and BHP Billiton scrap iron-ore project in Western Australia after opposition from regulators.

    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


    YOU MIGHT ALSO LIKE

    Meet the deported nurse aiding asylum seekers at US-Mexico border

    Meet the deported nurse helping refugees at the border

    Francisco 'Panchito' Olachea drives a beat-up ambulance around Nogales, taking care of those trying to get to the US.

    The rise of Pakistan's 'burger' generation

    The rise of Pakistan's 'burger' generation

    How a homegrown burger joint pioneered a food revolution and decades later gave a young, politicised class its identity.

    'We will cut your throats': The anatomy of Greece's lynch mobs

    The brutality of Greece's racist lynch mobs

    With anti-migrant violence hitting a fever pitch, victims ask why Greek authorities have carried out so few arrests.