Rio Tinto Ltd
(ASX:RIO) has warned that its proposed US$116 billion iron ore joint venture with BHP Billiton Ltd
(ASX:BHP) may be delayed until late this year.
Both miners have maintained the venture should be operating in the second half of this year, but sources claim the regulatory approval process is running well behind schedule.
Under the agreement, the joint venture partners will pool their iron ore mines, ports and railways in the Pilbara region into a single company that would rank as one of the biggest in Australia.
The Australian newspaper reports that Rio Iron Ore CEO Sam Walsh yesterday described the regulatory process as complex and demanding and said the European Union’s move to examine the deal meant there was no deadline on approvals.
Last month, the European Commission asked rivals and customers of BHP and Rio about their views on whether the proposed production merger would impede competition in the iron ore market.
The joint venture is expected to generate over $US10 billion in synergies.
Rio and BHP hatched the deal in June last year and expected it to be wrapped up by mid-2010.
Rio Tinto reported a profit of just over $5.432 billion for calendar 2009.
