BHP Billiton weighs in on iron ore inquiry debate

BHP Billiton’s CEO Andrew Mackenzie says an inquiry into Australia’s iron ore sector is unnecessary.

Speaking on ABC radio, Mackenzie echoed sentiments made my Rio Tinto’s iron ore boss yesterday, stating that an inquiry would send the wrong message about Australia’s commitment to free trade.

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

Mackenzie said any 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.

“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.

The comments from Mackenzie come after FMG’s chairman Andrew Forrest hit the media circuit yesterday to spruik the idea of an inquiry.

Forrest said that any inquiry would help determine whether the iron ore market was operating as a truly free market, or whether it was being distorted by the actions of certain industry members and to whose benefit and why.

“I believe it is in the national interest to fully investigate why certain industry players repeatedly made forward looking statements about oversupplying the market and how those statements contributed to the collapse in the price of iron ore,” Forrest said.

Questions surrounding the actions of the major miners have been publicly pushed by FMG’s chairman and founder Andrew Forrest in recent weeks.

Forrest is blaming the majors for the bearish sentiment which has befallen the iron ore industry and went as far as to urge the public to “stand up” and ask if the multi-national miners have a social licence to operate in a new website launched last week, ourironore.com

Forrest claims the major miners have made a deliberate play to keep prices down by flooding the market and making statements about the future increases in production.

Forrest says he is not pushing for an inquiry because he wants the government to intervene in Australia’s iron ore industry.

“I have supported the idea of an independent investigation into the causes of the price crash and how the price crash impacts Australia’s national interests,” Forrest said.

“In recent days there has been an attempt to paint my position as one of being an interventionist. There have also been scare comments about an inquiry damaging Australia’s reputation as a great place to invest and a trading partner.

“I am in touch every day with the global capital markets particularly in Asia, North America and Europe, and accordingly, I believe that these scare tactics are entirely without merit. 

“Just as we have the Foreign Investment Review Board to protect our national interest from issues pertaining to foreign capital, a parliamentary review into the iron ore price will provide an independent assessment of the causes of the recent price crash and how our national interests have and will be impacted by the recent price crash.”

Prime Minister Tony Abbott says he supports an inquiry as it would get to the bottom of the “claim and counterclaim” being made within the market.

However Abbott was quick to insist that any inquiry would not become a “witch-hunt” that unfairly targeted any one company.

“I think it is important to get to the facts and an inquiry may well be a very good way of doing that,” he said.

“If we are going to have an inquiry it has got to be a fair inquiry; it can’t be a witch-hunt, it can’t be directed against any particular company or companies – it has got to be fair and square and reasonable."

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