LONDON (Reuters) - European Union regulators are likely to pose the main regulatory challenge to BHP Billiton's (BLT.L: Quote, Profile, Research, Stock Buzz) planned takeover of mining rival Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), the International Iron and Steel Institute (IISI) said on Monday.
Steelmakers are concerned that further consolidation between Rio (RIO.AX: Quote, Profile, Research, Stock Buzz), BHP (BHP.AX: Quote, Profile, Research, Stock Buzz) and Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz) will give the miners too much leverage on pricing, IISI Secretary General Ian Christmas told the Reuters Global Mining Summit in London.
The three companies already control more than 70 percent of seaborne iron ore world trade.
"The battle will be won or lost in a European jurisdiction," Christmas said.
"The jeopardy to consumers is very strong. Already the price of raw materials is accelerating because of tight demand. Do you really want to create artificially tight demand on top of that?" he added.
Iron ore prices have risen by about 65 percent since the start of the year.
BHP's offer was valued at $147.4 billion when formally presented in February but has been rejected by Rio for being too low.
Christmas said he saw no economic rationale for combining the two companies.
"This is a huge transfer of wealth from consumers and society to the owners of holes in the ground," he said. "These are not small companies. Continued...
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