BHP Billiton sets iron ore price increase for Baosteel

EU to investigate BHP’s hostile takeover of Rio Tinto

By Dave Hannon -- Purchasing, 7/7/2008 9:13:00 AM

Iron ore mining giant BHP Billiton announced this week it has settled on price increases with Chinese steelmaker Baosteel, negotiating a 96.55% price increase for iron ore lump and 79.88% for iron ore fines.

While the increases are high, the stage was set last month when Rio Tinto announced its iron ore price increase deal with Baosteel for the same price increases.

But it wasn’t all good news for BHP Billiton as word came this week that the European Union would investigate BHP’s $170 billion hostile takeover of Rio Tinto. The EU is concerned about the merger’s impact on the EU's prices and supply of iron ore, coal, uranium and aluminum and mineral sands. The European Commission will have 90 working days to evaluate the merger’s impact before ruling on Nov. 11.

In a statement, the EC’s Competition Commissioner Neelie Kroes said "The recent surge in commodity prices has had a serious impact on the industries buying these commodities, their customers, and ultimately all the consumers in Europe and elsewhere in the world."