Getting gazumped is frustrating, humiliating and very expensive. But there's no point in throwing a hissy fit over it. You only end up looking like a sore loser. If you've never heard of gazumping, then count yourself lucky. It's a particularly unwholesome feature of the British property market or rather of the English property market; it's not possible in Scotland. Under English law, a property deal is not binding until written contracts have been exchanged. That can take a long time. After a buyer's offer is accepted, he or she must commission a structural survey, sort out all the legal documentation and often arrange a mortgage before the contracts can be finalised, which can be as much as three months later. At the height of the recent bull market, that was enough time for London house prices to rise 8 per cent, which gave the seller a powerful incentive to turn around at the last minute, renege on his earlier deal and accept a better offer. After months of labour, the unfortunate original buyer was left homeless, facing a heavy bill for survey and legal fees, and was no doubt spitting with rage at the seller's perfidy. In a word: gazumped! That's pretty much what happened to the state-owned Aluminum Corp of China in its US$19.5 billion attempt to acquire an 18 per cent stake in Anglo-Australian mining giant Rio Tinto, along with some of Rio's choicest assets. When the deal was first struck back in February, Rio's management was desperate. With commodity prices down 60 per cent from their 2008 peak, and with little hope amid the credit crunch of rolling over the US$18 billion in debt coming due over the next two years, Rio's bosses must have looked on Chinalco as their saviour. Things have changed since then. With commodities up almost 40 per cent and the credit markets easing, Chinalco's offer was no longer looking so attractive. Two weeks ago, Rio reneged on its deal with the mainland company, opting instead for a US$15 billion rights issue and a US$5.8 billion agreement with arch-rival BHP Billiton to fold their Western Australian iron ore operations into a single joint venture. Not surprisingly, Beijing officials are hopping mad at such treachery and are threatening retribution. On Wednesday, Chen Yanhai, the head of the raw materials division at the Ministry of Industry and Information Technology, said the proposed iron ore joint venture has 'an obvious colour of monopoly' and warned that under China's new anti-monopoly law, Beijing could impose sanctions on the two miners if the deal goes ahead. But although Rio and BHP are big companies, their iron ore venture would hardly be a monopoly. Together, their Western Australian iron ore mines produced 279 million tonnes of ore last year, slightly less than the world No1, Brazil's Vale, which mined 296 million tonnes. As the first chart below shows, in terms of global market share, that's relatively small, just 13 per cent, according to data from the United States Geological Survey. Their share of the mainland market is bigger, but with Australian ores making up a shade over 40 per cent of China's iron ore imports last year (see the second chart), their position is hardly dominant. What's more, even if Beijing officials do decide the proposed joint venture is a monopoly, it is hard to see how they could block the deal or punish Rio and BHP if it goes ahead. Neither company has operations in China, so Beijing has no jurisdiction. And if Beijing did impose punitive tariffs on ore purchases from BHP and Rio, which under the proposed deal will still run separate marketing operations for the venture's ores anyway, it would merely be cutting off its nose to spite its own face, pushing up the prices of inferior ores from elsewhere. In short, although China is BHP and Rio's biggest customer, it appears impotent. European regulators could still block the deal - both companies are headquartered in London - but there is little China can do by itself. So, like any other betrayed buyer, Beijing will have little choice but to swallow its pride and accept the indignity of getting gazumped - unless it wants to look like a bad loser.