Leading steel industry bodies will lodge formal objections to a controversial iron ore venture between Rio Tinto and BHP Billiton following the launch yesterday of a European Commission investigation into the deal.

Steelmakers in China, Japan and Europe have all opposed the tie-up between the mining giants, saying the joint venture will tilt the global iron ore market further in favour of three producers who already dominate the seaborne iron ore trade. The EU's competition watchdog will study the plan by the two companies to unite their operations in the world's richest iron ore belt in western Australia, which jointly produces nearly 40 per cent of the world's seaborne trade.

Key players in the mining and steelmaking industries view the Commission's investigation as the most important among competition reviews expected in Japan, Australia and China.