IISI Questions BHP-Rio Tinto Alliance

The International Iron and Steel Institute (IISI) has issued a formal request that all relevant competition authorities review the merger being considered between BHP and Rio Tinto.

Speaking on behalf of the Brussels-based association and the steel producers it represents,. IISI Secretary General Ian Christmas has stated: “IISI supports free and fair trade in steel. Competition between steel companies promotes innovation and efficiency. It promotes the growth in steel use and serves steel’s customers and society as a whole. IISI has also supported the consolidation of steel businesses but not to the extent of creating a monopoly. Even the largest steel company in the world today accounts for less than 15 percent of total world steel production.”

He adds, “In sharp contrast, the business of seaborne iron ore is dominated by just three companies. CVRD, Rio Tinto and BHP Billiton account for over 70 percent of total world trade.”

Concluding, Christmas remarks: “Any further consolidation between the big three would create a virtual monopoly in the business. For this reason, not only will the steel industry strongly oppose the potential merger of BHP Billiton and Rio Tinto, but it is vital that the competition authorities in the EU, USA, China, Australia and Japan also recognize the threat that this merger poses to the interests of steel consumers and the general public. This merger is not in the public interest and should not be allowed to proceed.”

The IISI represents approximately 180 steel producers, including 19 of the world’s 20 largest producers.