Statement Concerning Formal Notification by BHP Billiton to the European Commission of Proposed Rio Tinto Acquisition

June 2, 2008

Shoji Muneoka

Chairman

The Japan Iron and Steel Federation

 

On Friday, 30 May 2008, BHP Billiton announced that it was filing a formal notification to the European Commission in relation to its proposed acquisition of Rio Tinto.

There has been no official announcement by the European Commission regarding this filing at this time.  Nevertheless, JISF understands that the European Commission will commence a formal review of the proposed acquisition.

JISF has consistently stated its opposition to this proposed acquisition ever since BHP Billiton announced in November 2007 its intention of acquiring Rio Tinto, and remains opposed to this action.  We believe that the combination of these two companies would significantly impede sound competition in the seaborne iron ore and coking coal markets.  All Japanese integrated steel mills will make their opposition clear by actions, such as submitting complaints to the antitrust authorities of the major countries associated with the proposed acquisition.

As for fiscal year 2008, the price of hard coking coal has tripled and the price of iron ore has increased by more than 65% compared to the prices of the previous fiscal year.  These higher costs are creating serious problems for steel producers.  As a result, steel producers are forced to ask their customers to accept price increases for steel products to cover these costs.  Steel products are used in a wide range of industries from infrastructure development, such as the construction of bridges and buildings, to the manufacture of products of daily use, such as cars and high-tech devices.  Since this combination also poses the risk of further increasing the cost of producing steel and seriously affecting the Japanese economy, we will ask the major relevant antitrust authorities to block BHP Billiton’s proposed acquisition of Rio Tinto.

 

 

For more information about this subject：
  The Japan Iron and Steel Federation
   Secretariat Affairs & and Public Relations Group
   General Administration Division
        Tel: 03-3669-4822 Fax: 03-3664-1457
   Domestic Market Research Group
   Market Research & Development Division　
　　　 Tel: 03-3669-4819 Fax: 03-3669-0229