Friday, May 30, 2008

Steelmakers Try To Block BHP Billiton Bid

European steelmakers called Friday for EU regulators to block BHP Billiton Ltd's takeover of mining rival Rio Tinto PLC, saying the deal would allow a new iron giant to fix prices for steel's key raw material.

Eurofer, the European Confederation of Iron and Steel Industries, said it ''cannot believe that the (European) Commission will authorize the merger of two of three mining companies which dominate almost 75 percent of the world market for seaborne iron ore.''

The group's director general, Gordon Moffat, said the deal would give the new company the power to fix prices for iron ore and coking coal on top of surging increases in recent years.

''This is not in the interest of the European steel industry which has already had to pass on huge increases in raw material costs,'' he said in a statement.

The steel industry has seen costs soar in recent months. Companhia Vale do Rio Doce, the world's largest iron ore miner, struck a deal with six Asian steel makers in February to raise iron ore prices by 65 percent. The coking coal that heats furnaces has gone up 200 percent.

ArcelorMittal SA, the world's largest steelmaker and Eurofer member, has blamed these huge price hikes for its own price increases which force customers pay more for the steel that constructs buildings and is formed into cars and machinery.

A BHP Billiton takeover of Rio Tinto would combine the No. 2 and No. 3 iron miners and allow them to overtake Vale with a market share of almost 40 percent of seaborne iron ore.


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Steelmakers Try To Block BHP Billiton Bid

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