Rio Tinto, BHP Scrap Co-marketing Plan

JANE WARDELL

LONDON (AP) — Rio Tinto PLC and BHP Billiton Ltd. said Thursday they will keep iron ore sales separate from a proposed joint mining venture, scrapping plans to co-market some of the ore after pressure from global steel makers.

The two Anglo-Australian miners — the world's No. 2 and No. 3 in the iron ore market — had raised the ire of customers, particularly Chinese steel mills, with their plan to pool all their iron ore assets in Western Australia state.

The move would save the pair billions as iron ore prices slide, but has worried customers already unhappy with reliance on the three major global producers, rounded out by world No. 1 Vale SA of Brazil.

Rio and BHP had attempted to appease the market by pledging to keep their marketing operations separate for at least 85 percent of output, but on Thursday backed down further, saying that all production would now be marketed separately.

"The two companies believe that this change will clarify the nature of the JV for customers and emphasize its focus on realizing significant production and development synergies," the pair said in a statement.