The European Commission opened an in-depth investigation on Friday into BHP Billiton's $170 billion unsolicited bid for rival miner Rio Tinto, with prices of iron ore already soaring.

Australia will increase its scrutiny of foreign investments in Australian mining companies, Treasurer Wayne Swan said on Friday, particularly when the investor is also a major customer seeking a majority stake.

Steel magnate Lakshmi Mittal considered buying a stake in bid target Rio Tinto to expand his interests in iron ore but has decided against it for now, sources familiar with the matter said on Monday.

The resource sector is still the smart investment now, while those attracted to beaten-down financial stocks should proceed with care, analysts told CNBC Europe.

Miner BHP Billiton may be forced to scrap its plan to rewrite the way billions of dollars of iron ore are sold every year after rival Rio Tinto struck a benchmark deal with China, analysts said on Tuesday.