The Australian Competition and Consumer Commission (ACCC) will launch a probe into the merger of Rio Tinto and BHP’s Pilbara iron ore assets.
The ACCC has called for public submissions for its investigation into the likelihood that the asset merger will have the ability and incentive to withhold iron ore from the world market.
The probe will also investigate the possibility of collusion with the world’s largest iron ore supplier, Vale, in co ordinating their supply and output decisions.
The ACCC has launched a Statement of Issues highlighting the changes to the global iron ore market since the proposed merger will originally reviewed in 2008.
Since that time, the largest purchaser of iron ore within Australia – Bluescope Steel – has also raised concerns about the proposed tie up, the ACCC stated.
The iron ore merger is thought to be worth US$116 billion, with Rio and BHP estimating the venture will generate US$10 billion per year.
Investigations have also been launched in Europe and China following claims from steel mills that the joint venture will dampen competition and push up ore prices.
The ACCC will release its findings on 28 April.