Now this will be brilliant outcome for the old FMG, doubt it...

Now this will be brilliant outcome for the old FMG, doubt it will happen though but you never know. From the Age online today.

China sees red over BHP,

RioJohn Garnaut
June 12, 2009

THE Chinese Government could slam "trade sanctions" on BHP Billiton and Rio Tinto if they combine their iron ore businesses without first gaining permission from competition authorities in Beijing, a Chinese official has warned.

Japan's Fair Trade Commission has also warned it may launch a probe into the tie-up on the grounds that it could violate anti-monopoly laws.

The threats came after Rio last week walked away from what would have been China's biggest foreign investment deal -- a multibillion-dollar purchase of equity by Chinalco -- and opted instead for an iron joint venture with rival BHP.

The news came as a double blow to China. Business commentators attacked Australia's "discriminatory" investment climate and steel industry leaders railed at their vulnerability to the new iron ore "monopoly".

Yesterday China's Ministry of Commerce was reported to have indicated that the BHP-Rio joint venture would be reviewed by China's competition regulators and that both companies must apply for permission, which they are yet to do.

A ministry official went further, threatening trade sanctions on Australia's two biggest exporters if they don't comply.

"According to China's anti-trust law, we can veto such a merger agreement if the concentration of overseas business operators will affect domestic market competition," said Ma Yu, director of the Foreign Investment Department at the ministry's Academy of International Trade and Economic Co-operation.

If the joint venture went ahead regardless of China's opposition, Beijing could also resort to trade sanctions against the two companies on future business with China, he said.