China Carries out Anti-monopoly Investigation on Rio&BHP JV

China's Ministry of Commerce (MOC) is conducting an anti-monopoly investigation on the mining companies Rio Tinto Ltd. (RIO.AU) and BHP Billiton Ltd. (BHP) on their proposed joint venture (JV) for iron-ore operations, according to an insider from China Iron & Steel Association (CISA) on May 4.

The purpose of the investigation is to make sure that the JV, proposed to MOC at the beginning of the year, will not bring negative impact on the Chinese market competition, said an official from MOC.

MOC faces great pressure from domestic iron and steel industries as well as other related industries. ''Industries worry that the JV will aggravate iron-ore monopolism in China,'' said the MOC official.

The two companies communicate and coordinate actively with MOC on their JV proposal. The JV is limited to resource and infrastructural consolidation in the Pilbara region in Australia and iron-ore marketing will remain separate, which will not result in monopolism in China, said BHP.

But MOC has not received any evidence to attest that separate marketing will not result in monopolism, ''Separate marketing can not prevent the two companies from jointly controlling iron ore price,'' said the official.

According to China's Anti-monopoly Law, China can conduct anti-monopoly investigations into foreign companies if they have restrained or negatively impacted Chinese companies' competitiveness.