Australia's competition regulator said Thursday it will examine the ability of BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd. (RTP) to withhold material from the market as it assesses their planned iron ore joint venture.

The Australian Competition and Consumer Commission has released a statement of issues it will examine before it rules on the deal on April 28.

The regulator, which in 2008 approved BHP's failed full takeover bid for Rio Tinto, said the statement of issues highlights changes in circumstances in iron ore markets since that time.

These changes included the fact that the only significant buyer of iron ore in Australia, BlueScope Steel Ltd. (BSL.AU), has publicly raised concerns about the deal, the ACCC said.

"Issues to be further examined in the next phase of inquiries include the likelihood that the proposed joint venture would have the ability and incentive to profitably withhold supply from iron ore markets, whether the proposed joint venture entity and Vale have an increased ability and incentive to coordinate their supply decisions, and whether competitors are likely to be in a position to constrain these effects," the ACCC said.

- By Alex Wilson, Dow Jones Newswires: 613-9292-2094; alex.wilson@dowjones.com
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