CHINA TO INVESTIGATE MINERS

飞雪寒冰

China, the world's biggest buyer of iron ore, announced yesterday that it would launch an investigation into whether Rio Tinto, BHP Billiton and Vale are exerting illegal monopoly control over global iron ore pricing.

The announcement, which came from China's Ministry of Commerce, highlights Beijing's frustration at China's inability to control the price of a resource that is crucial to its steel industry.

“The commerce ministry's antitrust bureau is currently studying the issue,” a ministry spokesman said at a press conference.

Steelmakers elsewhere, including the European Union, have also raised competition concerns.

飞雪寒冰

The announcement confirmed reports earlier this week from state-affiliated media that such an investigation was possible.

But it was unclear yesterday whether the announcement will lead to a full-blown investigation.

Under China's new anti- monopoly law, which came into force in August 2008, investigations into monopoly pricing or cartel activity are not conducted by the Ministry of Commerce's antitrust bureau but by other branches of government which jointly enforce the anti-monopoly law.

飞雪寒冰

Beijing has so far launched very few monopoly pricing or cartel investigations, though it has been much more active in policing the anticompetitive effects of mergers and acquisitions, including those that take place entirely overseas.

The big miners are not thought to have been formally notified by the Chinese authorities of a possible investigation. BHP and Rio declined to comment.

Vale of Brazil and Anglo-Australian miners BHP and Rio dominate the global iron ore industry, accounting for about 70 per cent of the commodity's exports.

China's steelmakers have been vocal in their complaints about soaring iron ore prices and the recent demise of the 40-year old system that set an annual contract price for the commodity.