BHP Billiton's proposed $114bn (£64bn) hostile bid for rival mining giant Rio Tinto has been cleared by Australia's competition watchdog.The Australian Competition and Consumer Commission said any tie-up between the two firms "would not be likely to substantially lessen competition".BHP Billiton still has to wait for a ruling by the European Commission, which is not due until January.Rio Tinto has so far rejected all BHP Billiton's bid proposals.Shares in Rio Tinto soared as much as 14% in trading in Sydney following the ruling by the watchdog.'No guarantees'Analysts said the clearance in Australia made it more likely that European regulators would also back a deal."It's going to be very difficult for a competition commission in Europe to go against the findings of the ACCC here, given arguably the ACCC's probably closer to the action and more capable of understanding the ramifications," said Tim Schroeders, a portfolio manager at Pengana Capital."There's no guarantees, of course, because the flip side of that may be that European steel mills have a lot more say and lobbying power in convincing the European Commission otherwise."A tie-up between BHP and Rio would create a firm controlling a third of the world's iron ore market.Global steel companies have expressed their opposition to any deal.Both BHP and Rio are Anglo-Australian companies, with their shares listed in London and Sydney.