Rio Tinto’s Andrew Harding ‘stunned’ by Twiggy Forrest’s iron ore war – by Matthew Stevens, Julie-anne Sprague, John Kerin and Ben Potter (Sydney Morning Herald – May 20, 2015)

http://www.smh.com.au/

Rio Tinto iron ore chief executive Andrew Harding says he is stunned by the public campaign waged against the company by rival Fortescue Metals Group.

Mr Harding denied Rio Tinto is flooding the market with iron ore and expressed deep frustration with Fortescue founder Andrew Forrest’s aggressive public relations campaign, which he believes is winning political support by distorting reality.

Mr Forrest has led a public campaign against Rio Tinto and BHP Billiton for weeks that has won the support of Prime Minister Tony Abbott, who is supporting a parliamentary inquiry into the iron ore industry and the nation’s biggest taxpayers against several of his own cabinet ministers.

Mr Harding said there could be “extraordinary” ramifications for Australia in its strong reputation for promoting free and open markets.

“It is stunning. I am absolutely stunned,” he said in an interview. “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.”

Mr Forrest argues commentary from the big miners about future expansions has pushed down prices for iron ore on the futures market, which in turn crashes physical prices and wipes billions from government revenue.

The government is preparing a bi-partisan inquiry likely to be led by a Liberal backbencher, iron ore expert and Rhodes scholar, Angus Taylor.

Despite federal shadow resources minister Gary Gray revealing on Friday the Labor Party would support an industry inquiry, Opposition leader Bill Shorten said he wanted to see the scope of it before pledging any support.

For the rest of this article, click here: http://www.smh.com.au/business/mining-and-resources/rio-tintos-andrew-harding-stunned-by-twiggy-forrests-iron-ore-war-20150519-gh4mt9

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