TOKYO (AP) — The head of a federation of Japanese steel companies said Monday that his group was against the combination of two of the world's leading raw-materials suppliers.
Hajime Bada, chairman of the Japan Iron and Steel Federation, told a news conference that a melding of two of the largest raw-materials suppliers, BHP Billiton PLC and Rio Tinto PLC, is undesirable for industrial competition and pricing, according to a federation spokesman.
''We're afraid that a healthy pricing mechanism would be lost under their market dominance through a merger,'' said Bada, quoted by the federation spokesman, who spoke on condition of anonymity according to policy.
Bada said he would convey the message when he holds talks as president of JFE Steel Corp. — Japan's No. 2 steelmaker — with BHP Billiton CEO Marius Kloppers, currently in Japan to meet with industry leaders and clients.
Kloppers is also scheduled to visit business leaders and clients in China and South Korea before returning to Australia.
BHP Billiton, the world's biggest mining company, headquartered in Melbourne, is seeking to take over rival Rio Tinto. But its $150 billion (102 billion euros) proposal was rejected earlier this month.
The attempt by BHP Billiton, however, has fueled concerns in the Japanese industry about control over the market and the pricing of iron, copper and aluminum.
After a takeover, 60 percent of Japan's raw materials imports would have to come from the two companies, the spokesman said.
''That would be a major setback for the Japanese industry,'' he said.
Bada said, according to the spokesman, that Japan lacks a legal mechanism that would allow companies to object to a potentially damaging combination between foreign-based companies that do business in Japan. His federation was considering seeking help through Japan's trade ministry and the Fair Trade Commission, he said.
The federation is made up of 61 manufacturers, 60 trading companies and six industry groups.