The Chinese government is expected to flag concerns over a possible iron ore joint venture between Fortescue Metals Group and Brazilian miner Vale, while market and competition regulators in Australia are already investigating the plan and the way it was announced.
Under the non-binding, preliminary agreement announced on Tuesday, the world's second largest and fourth largest exporters of iron ore will become closely aligned and will blend a portion of their ores to create a new product for sale into China.
Despite steel production growth slowing in China in recent years, iron ore remains a strategic resource for China and analysts said they expected the Chinese ministry of commerce and potentially other regulators to raise concerns.
"Antitrust could be an issue. The seaborne iron ore market is highly consolidated as Vale, Fortescue, Rio and BHP will account for more than 77 per cent of seaborne iron ore supply in 2016," said Jefferies analyst Christopher LaFemina.
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