Gina Rinehart’s Hancock Prospecting has rejected fellow mining billionaire Andrew “Twiggy” Forrest’s call for an Australian iron ore cartel, adding to industry condemnation that has included Rio Tinto chief Sam Walsh calling the scheme “hare-brained”.
West Australian Premier Colin Barnett, who has called for BHP Billiton and Rio to stop flooding the market with excess iron ore and said their strategy was “dumb”, has backed away from the notion of joint action between suppliers, saying it would be illegal.
Mr Forrest, chairman and founder of Perth’s Fortescue Metals Group, has come under investigation from the competition watchdog this week for declaring that Rio, BHP Billiton and Fortescue should unite to cut production to drive prices higher.
The plan, labelled “extraordinary” and “concerning” by Australian Competition & Consumer Commission boss Rod Sims and “absolute nonsense” by Mr Walsh, would benefit Hancock’s Roy Hill project if it pushed prices higher, as Mr Forrest claims it would.
But Mrs Rinehart, the nation’s richest person, rejects the call. “There is nothing Australia can do about price other than be ready for it, and from an Australian perspective that means driving down our costs,” Hancock executive director, and Mrs Rinehart’s right-hand man, Tad Watroba, said yesterday from Hong Kong.
“In a free market, it’s up to each individual producer to decide how much they will produce in the current market circumstance — competition laws in Australia make it illegal to collude to rig pricing.”
In comments made to a dinner in Shanghai on Tuesday night, Mr Forrest said cutting back production would raise prices and provide more tax and royalty income for the nation. Mrs Rinehart, speaking in Hong Kong last night, rejected the notion it would be in Australia’s best interest to pull back on iron ore production. “If only we could do something about that falling iron ore price, well we can’t,” she said in notes to a speech to accept a lifetime achievement award at the Mines and Money conference.
“If Australia doesn’t supply iron ore, there are other countries who will, so we need to do what we can to cut Australia’s high costs.”
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