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Iron ore inquiry to send “wrong signal”

Iron ore
Iron ore

The iron ore debacle is continuing to cause uproar in the mining industry, with Industry Minister Ian McFarlane adamant that the government had no intention of conducting a parliamentary inquiry into iron ore production.  

Speaking on ABC radio yesterday, BHP Billiton CEO Andrew Mackenzie said an inquiry would send the “wrong signal” to international customers about the country’s commitment to free trade.

Mr Mackenzie said BHP Billiton supported Australia’s focus on trade and competition as drivers of growth and was committed to playing a role in improving the nation’s competitiveness.

“I believe that free trade is absolutely critical for the future of Australia and its place in the world,” Mr Mackenzie said.

“It’s good for the world economy and it’s good for geo-political harmony when people feel that they can count on Australia for the supply they need to grow.”

He said an inquiry would be an “amazing gift” for Australia’s competitors, given iron ore is a globally-traded commodity with other major sources of supply around the world in countries such as Brazil, South Africa, India and China.

Mr Mackenzie reiterated BHP Billiton’s strategy was rational, commercial and responsible with the company anticipating, and stating on many occasions, that supply growth would exceed demand growth.

He said BHP Billiton acted early and deferred around 180 million tonnes per year of growth opportunities in 2012 – 110 Mtpa from the Outer Harbour Development and 70 Mtpa from two additional berths not taken up in the Port Hedland inner harbour.

In line with comments by the Australian Competition and Consumer Commission, Mr Mackenzie said an inquiry would conclude the global iron ore market was operating according to market principles and no intervention was warranted.

“I am very confident if an inquiry goes ahead that we will see this as a well-functioning market which is in the interests of both customers and suppliers,” he said.

 

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