Rio Denies Making Final Decision To Abandon BHP Joint Venture

Rio Tinto PLC (RIO.LN) Tuesday denied a news report that it had decided to terminate a proposed $116 billion iron ore joint venture with BHP Billiton PLC (BLT.LN), saying it has not made any final decisions.

The Sydney Morning Herald reported in its Wednesday edition that Rio is preparing to abandon the deal, quoting unnamed sources.

Rio said in a statement late Tuesday in Europe that the miner has not made any final decisions "about possible outcomes or next steps" for the joint venture.

However, Rio said the company's board acknowledged in a meeting Monday that regulatory agencies in Japan, Korea, the European Union and Australia have indicated there may be obstacles to getting regulatory approval for the Rio-BHP iron ore production joint venture.

"[The] board acknowledged recent communications from regulators that indicate potential obstacles to achieving clearance for the joint venture."

A BHP spokesman declined to comment, while Rio officials were unavailable for a comment.

The Sydney Morning Herald cited sources saying Rio planned to inform BHP of its decision on Tuesday. It also said Rio's chairman Jan du Plessis told other board directors that he didn't think BHP would object to Rio's calling an end to the deal.

The proposed joint venture, which follows BHP's unsuccessful bid to take over Rio in 2008, has been expected to meet opposition from regulators in Europe and China concerned about the effect the deal would have had on world steel prices.

-By Matthew Walls, Dow Jones Newswires; [phone]; [e-mail]

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