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Anglo-Australian miners Rio Tinto PLC (RTP) and BHP Billiton Ltd (BHP) Thursday said they were "disappointed" by the German Federal Cartel Office's stated intention to block the miners' proposed iron ore joint venture.

The German regulatory process continues but the German Federal Cartel Office made a statement Thursday indicating that it would prohibit the joint venture, Rio Tinto said. BHP and Rio Tinto expect to receive a formal notification from the regulatory body next week.

The two mining titans announced a proposal to combine their iron ore operations in the Pilbara region of Western Australia in June 2009. Each company would be entitled to half of the joint venture's output and would market the iron ore independently of each other.

The proposal has faced strong opposition from large steelmakers who have expressed concern that the joint venture would concentrate pricing power even more in the hands of the top three iron ore producers who already control about two-thirds of iron ore trade over seas. Steelmakers also voice concern that it could limit future production capacity growth.

Both Rio Tinto and BHP said they continue to believe that the joint venture is "pro-competitive" and would "increase the supply of iron ore." They however acknowledged that the proposal faces mounting concerns from some regulators and strong opposition from some steelmakers.

Rio Tinto said "no decisions about next steps have been taken at this stage while regulatory discussions continue."

The joint venture is expected to produce combined synergies of more than $10 billion by streamlining infrastructure and investment decisions while at the same time producing more iron ore, more quickly, the companies have previously said.

At 1517 GMT, Rio Tinto shares were up 2.3% or 95 pence at 4,133p a share while BHP Billiton's shares were down 0.3% or 6.50p at 2,209.50p.

-By Alex MacDonald, Dow Jones Newswires; 44 20 7842 9328; alex.macdonald@dowjones.com (Jan Hromadko in Frankfurt contributed to this story)