Fraught iron

18 October 2010 By John Foley Follow @johnsfoley

Regulators have concluded the iron tieup with rival BHP Billiton would harm competition. Judged by the market reaction, investors didn’t believe the deal would happen, or that Rio was getting an even share. The saga has not done Rio boss Tom Albanese’s credibility any favours.

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Rio Tinto and BHP Billiton, the AngloAustralian miners, ended plans for an iron ore joint venture in Western Australia on Oct. 18, after regulators indicated they were unhappy with the deal.

Antitrust regulators in Europe, Australia, Japan and Korea all said they would not approve the current proposal, which would see both sides pool their production facilities in the Pilbara region.

The joint venture was first announced on June 5 2009, along with a $15 billion rights issue by Rio. On Oct. 6 2010 Rio admitted that the deal faced "potential obstacles to achieving clearance" from regulators.

BHP's Australianlisted shares fell 1.1 percent on Oct. 18. Rio's shares fell 0.26 percent. BHP's shares have risen 4.2 percent in October, while Rio's shares have risen 7 percent.

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