The proposed iron ore joint venture between mining giants BHP Billiton Ltd
(ASX:BHP) and Rio Tinto Ltd
(ASX:RIO) may have hit another stumbling block after the Australian Competition and Consumer Commission demanded further information from the joint venture partners.
According to a report in the Australian, the ACCC has extended its investigation into the merger of the two miner’s iron ore assets in Western Australia, by another month until May.
The watchdog’s call for more information is the second in six weeks, says the paper, and comes amid speculation the venture may be becoming less attractive to Rio as iron ore prices jump.
The Australian says an improving iron ore market may reduce a US$5.8 billion equalisation payment BHP would need to make to Rio as part of the proposal, to closer to US$3.6 billion.
The ACCC’s desire to extend its probing of the deal comes after it said it had received concerns from parties who believe that the merger would significantly reduce competition, in terms of volumes, price and quality, between the two miners.
In fiscal 09 BHP reported earnings of $7.2 billion.
