Mining giant Rio Tinto's 120 billion dollars (116.6 billion U.S. dollars) iron ore joint venture with BHP Billiton in Western Australia is close to collapsing, after regulators objected to the deal, local media reported on Wednesday.

In a statement, Rio Tinto has confirmed the joint venture was discussed on Monday but said the board had "not made any final decisions about possible outcomes or next steps".

However, Rio Tinto has acknowledged concerns from competition regulators indicating "possible obstacles to achieving clearance for the joint venture".

The iron ore deal faced opposition from European and Chinese buyers concerned the two companies would control global iron ore prices.

According to The Australian newspaper, Rio expected that the deal would have produced estimated savings of 10 billion U.S. dollars and Rio, which has the bigger share of Western Australia's operation, would have earned 5.8 billion U.S. dollars from BHP to equalize their holding.

If the move by Rio Tinto's board goes ahead, it would end the biggest merger attempt in Australian financial history.

When the deal was cut in 2009, Rio was heavily in debt and had fallen out with Chinese miner Chinalco.

But since then, Rio's debt was down by 40 percent and it has struck a 12 billion dollars (11.7 billion U.S. dollars) iron ore deal with Chinalco in western Africa.

The failed iron ore joint venture follows BHP Billiton's failed 180 billion dollars (175 billion U.S. dollars) takeover bid for Rio two years ago.

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