The cost of finished copper is at historic low levels

Competition officials in Europe, Canada and the United States have carried out simultaneous raids on the offices of industry leaders including Rio Tinto and BHP Billiton.

Companies found to be operating a cartel can be fined up to 10% of their worldwide annual sales.

The investigation is expected to concentrate on why producers have been increasing their charges for the raw material at a time when the cost of the finished metal is hovering at historic low levels.

Proving collusion

Although the price of copper is dictated by the market, the price of the raw material from which it is made - refined ore known as copper concentrate - is not.

The smelting companies that turn it into the finished product buy more than half of their supplies from just 10 giant mining companies.

It is not known who made the complaint but it is no secret that many smelting companies have seen their profit margins squeezed.

And European firms have been put under further pressure by the rising value of the Euro.

The raids surprised most industry observers - and were co-ordinated to prevent any chance of targeted companies warning each other.

But Tony Warwick-Ching from industry consultants CRU International says price fixing will be hard to prove.