BHP, Rio Tinto sign joint venture deal

LONDON: Mining giants BHP Billiton and Rio Tinto said in a statement yesterday that they have signed a binding agreement on combining their vast iron ore operations in Western Australia, and have submitted the deal to the EU.

In a joint statement, the two firms said the agreement first announced on June 5, aimed at savings worth an estimated $10 billion had now been confirmed.

“The companies today signed binding agreements on the proposed joint venture that cover all aspects of how the joint venture will operate and be governed,” the statement said.

Submissions had been made to both the Australian competition commission and the European Commission regarding the deal, they said, adding that they understood the EU authorities were already investigating the tie-up.

European steel makers had called for an investigation amid concerns that the merger would be anti-competitive.

The joint venture was announced after the collapse of a $19.5 billion bid for Rio by Chinese state-owned firm Chinalco. It also followed BHP’s dropping last November of a hostile takeover bid for Rio amid the prevailing global economic turmoil.