European steelmakers are hopeful that EU regulators will take a tough line on miner BHP Billiton's proposed $115 billion takeover of Rio Tinto due to competition concerns about iron ore and coal.
Steelmakers, faced with price hikes in iron ore of 65-71 percent this year, are worried that combining Rio and BHP, the world's second- and third-biggest iron ore producers respectively, might boost their pricing power and tighten supplies.
"We are quite encouraged actually by the degree of resources and the commitment which they are putting to the process at this stage," Gordon Moffat, director general of industry body Eurofer, told Reuters in an interview on Tuesday.
"They (EU officials) have tended to really put a quite significant degree of interrogative questions to us during the hearings, which is encouraging from our point of view, which means they are treating this seriously."
Neither the EU, BHP nor Rio has commented on details of the hearings so far.
Brussels-based Eurofer represents the European steel industry -- including ArcelorMittal, ThyssenKrupp and Salzgitter -- which produces a total of more than 200 million tonnes each year.
On July 7, the European Commission opened an in-depth investigation into BHP's all-share hostile bid, saying it would lead to "very high" levels of market concentration.
BHP, the world's biggest mining group, would gain new power over iron ore and reinforce its leading position in metallurgical coal, the two main ingredients in producing steel, the EU's executive arm has said.
BHP has expressed confidence that regulators will approve the takeover, but analysts say the EU is likely to require the company to dispose of some iron ore assets to reduce its concentration in the market.
Full Story at - Reuters.com
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