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The German Federal Cartel Office's announcement that it intends to prohibit the proposed iron ore joint venture between Rio Tinto PLC (RIO) and BHP Billiton Ltd. (BHP) should be followed by a similar decision at the European Commission, Eurofer, the association that represents European steelmakers, said Friday.

"We are confident that the European Commission will follow soon with a similar decision," said Eurofer director general Gordon Moffat.

Iron ore is a key ingredient in steelmaking and steel producers have blamed iron ore price volatility and rises on strained margins.

BHP and Rio Tinto previously said the joint venture would create savings of more than $10 billion by allowing them to streamline their infrastructure and investments in the Pilbara region of Western Australia in order to produce more iron ore at a faster pace.

Under the companies' proposal, each would be entitled to half of the joint venture's output and would market the iron ore independently of each other.

"The effect of the JV on the global iron ore market would not have been materially different from the full merger which had been proposed in 2008," Eurofer said. "It effectively would have created a duopoly with the global iron ore market in the hands of just two companies."

BHP Billiton and Rio Tinto have market shares of 17% and 19% respectively in the seaborne iron ore market, while Vale, (VALE) the third mining giant, controls 33%, Eurofer said.

Combined they account for about two-thirds of the iron ore traded overseas.

Eurofer represents large steelmakers in Europe such as ArcelorMittal (MT).

-By Devon Maylie; Dow Jones Newswires; +44(20) 7842 9483; devon.maylie@dowjones.com