EU may probe long-term effects in BHP-Rio case

LONDON (Reuters) - Brussels regulators are taking the unusual step of looking at long-term effects of miner BHP Billiton's ( $170 billion (86 billion pounds) bid for rival Rio Tinto, according to people who have seen an EU questionnaire. The Commission has gone well beyond the usual two or three years and is asking competitors and customers about effects of the deal on their businesses out to 2015, the sources told Reuters. A European Commission spokesman had no comment, noting the Commission never comments on pending merger reviews. The longer time frame means the Commission will not only be looking at a combined firm having a bigger market share in iron ore, the main focus of the probe, but controlling much of the Australian deposits giving it ability to expand, analysts say. "I think that this raises the risk ... of whether the commission is going to agree on this merger eventually materialising," said analyst Luc Pez at Oddo Securities in Paris. "This case becomes very problematic, especially in iron ore, given the large concentration for both BHP and Rio in the iron ore resource base, especially as the bulk of their reserves are in Australia." The European Commission, the European Union's executive arm, has responsibility for peering into the future and assessing the competitive effects of creating a world-wide mining behemoth that trades from China to Europe. Iron ore is expected to be the main focus for regulators since a takeover would combine the world's second and third biggest producers of the key raw material for steelmaking. Source: Reuters