Australia Extends Deadline on BHP-Rio Joint Venture Plan

Extension will allow the mining giants to make additional submissions to the Australian Competition and Consumer Commission.

Australia's competition regulator said July 7 it had suspended its review of a proposed iron ore tie-up between Rio Tinto and BHP Billiton to allow the miners to make additional submissions.

The Australian Competition and Consumer Commission was due to deliver its findings on the Pilbara joint venture on July 22, but said it had been asked to extend the deadline.

The July 22 date had been "suspended at the request of the joint venture parties to allow them to make additional submissions to the ACCC," the watchdog said, adding that a new proposed date would be announced "in due course."

The Anglo-Australian mining giants want to combine their iron ore operations in Western Australia's Pilbara region in a deal which would see BHP pay Rio US$5.8 billion to equalize the venture as a 50:50 partnership.

Controversy over a proposed 40% "super tax" on mining profits which led to the lightning ouster of former prime minister Kevin Rudd has cast doubt over the tie-up, with BHP warning it could cut the value of the deal.

New Prime Minister Julia Gillard last week announced a compromise deal taxing only iron ore and coal at a reduced rate of 30%, and with a higher threshold of 12%.

The BHP-Rio joint venture, which had been due to be finalized by mid-2010, has also been delayed as the European Union's competition watchdog investigates.

Opposed by steelmakers in Asia and Europe, the joint venture updates an original hostile takeover bid for Rio by BHP which was dropped in November 2008 due to the global financial crisis.

The ACCC favored the 2008 proposal, but warned in March that the global iron ore market had changed considerably following the credit crunch and was potentially less competitive.

Copyright Agence France-Presse, 2010

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