Brussels, 25/01/2010 (Agence Europe) - On Monday 25 January, the European Commission announced that it had opened a formal antitrust investigation into Anglo-Australian mining companies Rio Tinto and BHP Billiton under the EU rules on restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union - TFEU). Rio Tinto and BHP Billiton are respectively the second and third largest producers of iron ore in the world. The proposed joint venture between Rio Tinto and BHP Billiton would combine the parties' iron ore assets in Western Australia. Opening of proceedings does not imply that the Commission has conclusive evidence of an infringement but merely that the Commission will investigate the case as a matter of priority. The proceedings concern the agreement signed on 5 December 2009 between BHP Billiton and Rio Tinto to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets. The Commission will in particular examine whether the joint venture would have a negative effect on competition on the worldwide market for seaborne iron ore. Iron ore is the main component of steel. Virtually all iron ore mined worldwide is used in steel production. Three companies - Vale of Brazil, Rio Tinto and BHP Billiton - account for most of the iron ore sold worldwide on a seaborne basis. In 2008, the Commission examined under the EU Merger Regulation the full acquisition of Rio Tinto by BHP Billiton. The transaction was abandoned by BHP Billiton on 26 November 2008.The current investigation, based on Article 101 TFEU, concerns a different operation as the agreement between the parties now focuses on the establishment of a joint venture for iron ore production, leaving the marketing activities of the companies separate. In a press release, Gordon Moffat, Director General of the European Association of Iron and Steel Producers (EUROFER) declared: “We very much welcome the decision of the Commission…We remain convinced that the joint venture would be an unacceptable concentration which will significantly restrict competition in the seaborne iron ore market.” (L.C./transl.fl)