Mining firms abandon plan to merge iron ore operations

The deal would have meant the companies sharing iron ore sites

Mining companies BHP Billiton and Rio Tinto have dropped plans to combine their iron ore operations in Western Australia.

The $116bn (£72.6bn) joint venture would have led to the firms sharing each other's mines and transportation facilities.

But it has faced heavy opposition from national regulators concerned about the effect on iron ore prices.

The firms said they were "reluctantly" ending the deal.

'Anti-competitive'

Iron ore is the principal raw material in the production of steel.

Both Rio Tinto and BHP Billiton have major iron ore operations in the Pilbara region of Western Australia.

The companies had estimated cost savings of around $10bn (£6.3bn) a year through the sharing of infrastructure and personnel.

However several national regulators were concerned that the joint venture would have been anti-competitive.

Regulators in the European Union, Japan and South Korea were amongst those to express opposition to the deal.

Authorities in China, the world's biggest consumer of iron ore, also opposed it.

"The full value of the synergies on offer from a 50:50 joint venture was a prize well worth pursuing," said Rio Tinto chief executive Tom Albanese.

He added he was disappointed by the failure to convince regulators of the benefits of the tie-up.