New website campaigns against iron ore oversupply

A new website supported by FMG, Our Iron Ore, is urging the public to campaign against “multinational companies” which it says are oversupplying the iron ore market.

The new campaign site urges people to sign a petition in order to ensure a “sustainable future for our important mining industry”.

The site is supported by Fortescue Metals Group.

“Iron ore is Australia’s most important single export earner and a dramatically falling price is putting significant pressure on current and future living standards of all Australians,” the site states.

“Australia’s export income is being savaged, along with tax and royalty returns to state and federal governments, shareholder returns, superannuation fund values, jobs and activity in the economy.”

In the facts and figures section, the site claims 37,000 jobs were lost in mining in 2014. It also states that Australia’s GDP was hit by 0.5 per cent or $8 billion when the iron ore price fell 17 per cent in March this year.

While the site doesn’t specifically name the iron ore miners to which it is referring, it’s not hard to read between the lines.

FMG’s chairman and founder Andrew Forrest has led an aggressive campaign against his competitors Rio Tinto and BHP Billiton over the last month.

The price of iron ore has halved since this time last year and is currently trading at around $US59 a tonne.

However it dropped to $US47 per tonne in early April, and the government’s latest budget has predicted a price average of $US48 per tonne for 2015-16.

The price cut is expected to slash around $A20 billion in tax receipts from forward estimates.

Since the last budget, the value of forecast iron ore exports has been downgraded by around $90 billion.

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.

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.

In late April, Forrest said the majors should look to cap production in order to usher in a price rise – a suggestion blasted by the wider industry.

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