Steel firms oppose BHP-Rio deal

Record metal prices are boosting mergers in the mining sector

The proposed merger between Anglo-Australian mining giants BHP Billiton and Rio Tinto has been criticised by Japanese steelmakers.

Hajime Bada, chairman of the trade group Japan Iron and Steel Federation, said the merger could "impede a healthy market price mechanism" for iron ore.

Mr Bada, who also heads JFE Steel, the world's third-largest steelmaker, said he would meet BHP Billiton later.

Rio Tinto has so far rejected BHP Billiton's $140bn (£68bn) approach.

Mr Bada said he would express his opposition to the merger at a meeting with BHP Billiton's chief executive, Marius Kloppers.

Global giants

The Japan Iron and Steel Federation estimates that a merged BHP Billiton and Rio Tinto would control 60% of Japan's iron ore imports.

A combination of BHP and Rio Tinto would create a firm worth about $350bn.

While BHP Billiton is the world's largest mining company, Rio Tinto is the third biggest.

JFE Steel is the world's third largest steelmaker. The world's largest is ArcelorMittal, and Japanese firm Nippon Steel is in second place.