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Chairman's Comments

Statement concerning Western Australian iron ore production joint venture of Rio Tinto and BHP Billiton

December 7,2009
Shoji Muneoka
Chairman
The Japan Iron and Steel Federation

On December 5, 2009, Rio Tinto (RT) and BHP Billiton (BHPB) announced that they signed binding agreements for the establishment of a production joint venture concerning iron ore operations in Western Australia (JV).

Details of the agreements have not yet been made clear, but according to RT and BHPB, not proceeding with the initially planned JV marketing activity is the only material change to the core principles of the JV announced on June 5 of this year.  

The Japanese steel industry continues to view the establishment of the JV as a move that would restrict competition just as the last year’s proposed acquisition of RT by BHPB would have, by integrating all iron ore operations of RT and BHPB in Western Australia.  The abandonment of JV marketing will not change the essential nature of the problem, and will not affect the Japanese steel industry’s position opposing the JV.  

According to the joint announcement of RT and BHPB, the companies have already filed submissions with the European Commission and the Australian competition authorities, and expect to submit filings in other relevant jurisdictions shortly. The Japanese steel industry will continue to request the Japan Fair Trade Commission and other relevant competition authorities to thoroughly examine the JV, and will cooperate fully with the investigations by such authorities.

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