The Rio Tinto (ASX: RIO) Board of Directors have not made any final decisions whether to pursue or not their planned iron ore venture with BHP Billiton (ASX: BHP) in Western Australia seen to earn and save the companies billions of dollars.

This in spite some negative analysis from Merrill Lynch that the joint venture may soon be off because of the regulatory impediments it is now facing.

In a statement on 5 October, the Rio Tinto Board announced that after its board meeting on 4 October 2010, there is yet to be any final decisions reached although discussions on the matter were brought up.

The emailed company statement said: "We have not made any final decisions about possible outcomes or next steps relating to the proposed Rio Tinto/BHP Billiton iron ore production joint venture in Western Australia.

"The Board acknowledged recent communications from regulators that indicate potential obstacles to achieving clearance for the joint venture. This includes the recent receipt of interim reports from the Japan Fair Trade Commission and the Korea Fair Trade Commission, and ongoing discussions with the European Commission and the Australian Competition and Consumer Commission," it added.

Meantime, a mining industry analysis raised by Merrill Lynch in a report by Bloomberg said the deal would possibly be aborted because of the legal impediments.

Merrill Lynch analysts led by Peter O'Connor said in a report published on 6 October and published online by Bloomberg: "Given the obstacles to the joint venture clearance it would appear that the likelihood of joint venture discussions 'in good faith' continuing past the drop dead date of Dec. 31 is increasingly remote."

Two of the world's biggest mining companies listed in the Australian Stock Exchange wants to file more pertinent submissions to the Australian Competition & Consumer Commission for their proposed iron ore collaboration.

In a related report of the Wall Street Journal, it said the delay being sought by the two mining giants would be for the new mining tax structure pending for implementation.

The two companies wanted to form a production joint venture to save no less than $10 billion in similar costs associated in mineral processing and transporting of the ore.

BHP and Rio Tinto executives said that the alliance will enable them to make the most of their two prime enablers to run smooth operations: blend iron ore from any of their mines, the flexibility to use all rail and port infrastructure.

Analysts said the main concern of mineral producers now is to minimise their operational costs to cope with any pending taxes imposed by the Australian government.

China's increasing iron ore demand

China, the biggest importer of iron ore, is seen to magnify its requirements as the state decided to stop its electricity cutbacks implemented this year to meet environmental targets.

With China's steel-making plants going on full-gear by year-end, more iron ore imports from Australia and other producers will be required.