Rio Tinto’s iron ore boss Andrew Harding said he is “stunned” by the public campaign launched against the company by fellow iron ore miners.
The smaller Pilbara miners have all suffered as a result of the falling price of iron ore, which has plunged more than 60 per cent since the start of 2014.
All have been forced to cut jobs, close mines and write-down the value of their assets as the price fall proved too much for their break-even costs.
The juniors are blaming the major miners BHP Billiton and Rio Tinto for the commodity’s downturn.
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.
However Harding denies his company is oversupplying the market and says any inquiry could hurt Australia’s reputation.
"It is stunning. I am absolutely stunned," Harding said.
"As I keep saying, there is a reality dysfunction. The commercial reality of it all gets overlaid by the claim 'that is rubbish' and 'that is not how it works', but no one ever goes on to explain how it works in the alternative.
"The reality is Australia has a great reputation internationally for its commitment to free and open trade … but if the only time you get to demonstrate how supportive you are of free trade and open markets is when you are going through the bottom of a cycle, the ramifications could be extraordinary."
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."
Harding says mining is a cyclical business, and is confident that an inquiry will show the markets are operating freely and properly.
He said Rio Tinto’s ramp up to 360 million tonnes of iron ore per annum will be finished in the next couple of weeks – and Harding is unapologetic about the investment his company has decided to make.
“It is now down to getting the paperwork done. I will have 360mtpa of capacity and I have to get a return on that investment. While ever I can sell iron ore and make a great profit, I will do it,” Harding said.
"The royalties from what I do are revenue based. The more successful we are in the longer term, the more tonnes I put out there, the more revenue-based royalties flow back to Australia.
"It might not be a very convenient story right now and it might not be a convenient story for people that are struggling right at this moment. Right now it is difficult. But roll forward a few years and this will be the best thing for Rio Tinto shareholders, the best thing for Western Australia and the best thing for Australia. And the only alternative I have is to form an illegal cartel and I can guarantee that I am not going to do that."