WA Premier backpedals on Rio, BHP collusion claims

West Australian Premier Colin Barnett has backed away from comments he made about Rio Tinto and BHP, saying he never meant to suggest the companies were colluding.

West Australian Premier Colin Barnett has backed away from comments he made about Rio Tinto and BHP, saying he never meant to suggest the companies were colluding.

Barnett took several swipes at the state’s biggest miners over the last couple of days.

First he told them to “remember who you landlord is” while questioning their strategy of increasing iron ore supply into a sluggish market.

While on Tuesday the comments became more heated, with the premier stating the business policy being employed by the miners was flawed.

“And I think it will be a failed policy — no doubt about it — and I find it strange that the companies are acting seemingly in a concert way,” Barnett told parliament.

"This is the third iteration of some sort of arrangement it seems between BHP and Rio and maybe other iron ore producers.”

But Barnett has backed away from the comments and said he is not accusing the two of collusion, WA Today reported.

"I'm not suggesting the companies are dealing with each other, so if I created that impression, I regret that," Barnett said on Wednesday.

"I used the term in concert, some may have read more into that than intended.”

However Barnett stood by his criticism of increased production, which he said was hurting the industry.

“They are employing a very similar policy, probably for their own reasons, but maybe the same reasons, which I think is damaging to the West Australian economy, to the iron ore industry, to the small iron ore producers and the people they employ."

"Both companies are pushing record volumes of iron ore into the world market at a time when there is an oversupply in iron ore, lesser demand from China or a slow down in their growth and demand," he said.

"In that environment, in a softening in demand, I do not think it is a good commercial policy to be pushing more iron ore at record rates into the market – that was my original comment and I stick by that."

Speaking at a conference in Sydney yesterday, Rio Tinto boss Sam Walsh said Barnett shouldn’t complain about the company’s strategy to increase production seeing as the government signed off on the plan.

"I'm not sure where Colin is coming from in that given that we've been very clear in our plans and our expansions are approved by government," Walsh said.

Walsh stood by Rio’s expansions plans, stating the company was a “great business” that will survive the current downturn.

The iron ore price slide, which has lost 35 per cent since January, has caused fears lows of $US80 a tonne are the new norm.

But Walsh said demand is still strong and urbanisation and industrialisation in India, south-east Asia and China meant a positive long-term outlook.

“It’s a cyclical industry: we go through cycles we shouldn't panic when there's a blip in iron ore pricing," he said.

"As each of these countries goes through the same urbanisation and industrialisation, our commodities will be needed so Colin shouldn't worry.”

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