Oct. 15 (Bloomberg) -- Rio Tinto Group and BHP Billiton Ltd. will separately sell iron ore from a proposed venture, scrapping a plan to jointly market as much as 15 percent, amid pressure from global steelmakers.

“This change will clarify the nature of the joint venture for customers and emphasize its focus on realizing significant production and development synergies,” Rio and BHP said today in a statement. The world’s second- and third-biggest iron ore producers agreed in June to combine their iron ore assets in Western Australia to save them more than $10 billion.

An aborted takeover by BHP for Rio last year had faced a probe from the European Commission, which had “serious doubts” over a combination that would control more than a third of global iron ore exports. The proposal should be blocked by the commission, the World Steel Association, which represents 19 of the biggest steelmakers, said this week.

“It’s not worth wrecking the chance of the whole thing so they just have to drop it,” Peter Arden, a Melbourne-based senior mining analyst at Ord Minnett Ltd., an affiliate of JPMorgan Chase & Co., said today. “If there’s any concept that they could be marketing something together, that won’t go down well” with regulators, he said.

BHP, based in Melbourne, rose 1.3 percent to A$38.90 at the 4:10 p.m. close in Sydney of the Australian stock exchange. London-based Rio’s Australian shares gained 2.4 percent to A$64.79.

Agreement On Schedule

Agreements to complete the joint venture are on schedule, Melbourne-based BHP and London-based Rio said today. BHP Chief Executive Officer Marius Kloppers said in August that the venture would be completed by mid-2010.

BHP may use its knowledge of the commission’s concerns in the failed Rio bid to structure the venture to win approval, UBS AG said in June. The venture has been opposed by steelmakers in China, Europe and Japan on competition concern.

The venture won’t reduce competition in the global market, Sam Walsh, the chief executive officer of Rio’s iron ore unit, said last month. The maintenance of separate sales and marketing operations by the companies would make the deal less “onerous” than a takeover, Kloppers said when he announced the deal.

China is the world’s biggest buyer of iron ore and imports last month rose to a record. BHP and Rio agreed to the joint venture after Rio scrapped a proposed $19.5 billion investment from Aluminum Corp. of China.

To contact the reporters on this story: Jesse Riseborough in Canberra at jriseborough@bloomberg.net; Madelene Pearson in Melbourne at mpearson1@bloomberg.net

Last Updated: October 15, 2009 02:20 EDT