Rio Tinto CEO Tom Albanese said the miner would keep seeking regulatory approval for a $116bn joint venture with BHP Billiton after a report that the deal faces collapse.

Global miners BHP and Rio expect the iron ore joint venture in Western Australia will fail to get regulatory approval, the Sydney Morning Herald reports.

The joint venture would generate $5bn in cost savings annually for BHP and comes as the world’s largest diversified miner launches a $39bn hostile bid for Potash Corp.

Albanese, speaking to reporters on the sidelines of an industry conference in Shanghai, said the technical arguments for the iron ore joint venture remained strong.

“The synergies are worth striving for, we’re going to continue to strive to attain those synergies,” Albanese said.

“We’re going to do everything we can to see if we can attain those synergies through the regulatory process.”

Rio and BHP officials in Australia declined to comment on the report, which quoted mining executives saying competition regulators in various jurisdictions had rejected the two miners’ arguments that the venture would not have price-setting power.

“It’s dead and the coffin’s being lowered into the ground. It’s a matter of finding a face-saving way out in the coming months,” the Sydney Morning Herald quoted one senior mining executive as saying. The executive was involved in talks with regulators, it reported.

The newspaper said the regulatory mood had turned against the joint venture after the world’s top three iron-ore miners – Rio, BHP and Brazil’s Vale – imposed quarterly iron ore pricing on their reluctant Asian customers this year.

Rio and BHP want to combine their iron ore operations in Western Australia, estimating they will share in $10bn in cost savings. They had hoped to gain regulatory approval by the end of this year.

But the venture, unveiled last December, is awaiting approval from regulators in Australia, Europe, China and elsewhere, and sceptical regulators, especially in Europe, have indicated their reservations by issuing a barrage of queries, the paper said.

BHP recently launched a hostile bid for Canada’s Potash Corp, the biggest takeover deal this year, and some analysts suggest the deal could take BHP’s resources away from pushing the iron ore joint venture.