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PrintChina's anti-monopoly law will apply if revenue from the Rio Tinto-BHP Billiton joint venture reaches "a certain amount," the China Mining Association reported Tuesday, quoting the Ministry of Commerce.
Rio Tinto scrapped a proposed $19.5 billion investment by Aluminum Corp. of China, or Chinalco, on June 5, and turned to rival BHP Billiton, which will be paying Rio Tinto $5.8 billion to set up a joint venture to run iron ore resources of both companies in west Australia.
"As the world's second- and third-largest iron ore suppliers, exports from the two mining giants comprise 80% of exports from Australia, and 36% of the world's total," MOC spokesman Yao Jian said.
"Their tie up will certainly affect global supply. It is reasonable that China, the world's biggest iron ore importer, is concerned about it," he said. "If their revenue reaches a certain amount, Chinese anti-monopoly law will apply."
China's anti-monopoly law requires a company to get government approval before consolidation if its global revenue exceeds Yuan 10 billion ($1.47 billion) and its revenue in China exceeds Yuan 2 billion.
An anti-monopoly review is also necessary if two or more parties in the company have more than Yuan 400 million of revenue in China in the previous fiscal year.
According to the London-based Iron and Steel Statistics Bureau, the two mining giants exported 270 million mt of iron ore in 2008, of which 70% went to China. That comprised half of China's imports.
In the year ended June 30, 2008, BHP Billiton's revenue in China was $11.7 billion, while that of Rio Tinto was $10.8 billion, the companies' websites showed.
Yao said the ministry had not received an application from either firm.
It was unclear what actions China would take if the case was determined to be covered by the Chinese anti-monopoly law. –Platts
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