Forrest backs Cliffs CEO call for Australian iron-ore inquiry

PERTH (miningweekly.com) – Mining magnate Andrew Forrest has backed calls from US iron major Cliffs Natural Resources for an inquiry into the Australian iron-ore market.

Speaking at the Global Iron Ore and Steel Forecast conference, in Perth, Cliffs chairperson, president and CEO Lourenco Goncalves said that Australia had missed an opportunity in 2015 to address the glut in the iron-ore market by not undertaking an inquiry into the supply side of the industry.

“I hope we don’t miss any more opportunities to understand what is happening in the business, and in the pricing mechanism of iron-ore, or who is gaining and who is losing, and what the long-term consequences are of all our actions as mining companies, especially those in Australia.”

Speaking on the sidelines of the conference, Forrest said that Australia needed to “carefully distill” comments from overseas miners over the management of the iron-ore industry and the supply side insensitivity shown by local producers, as well as the “aggressive attempt” to eliminate competition despite the consequences to the Australian economy.

“I would say let's look at why an overseas statesman, who can scrape away at all the corporate propaganda and say this is how it is, this is what you let happen. Yes, it deserves an investigation into a supply side strategy to crush competition, but which did nothing but crush the Australian economy.”

Forrest in 2015 pushed for a government inquiry into the Australian iron-ore market, blaming majors Rio Tinto and BHP Billiton for flooding the market with Pilbara product, which, in turn, led to a decline in the iron-ore price.

Then federal Treasurer Joe Hockey took the decision not to initiate a Senate inquiry after discussions with regulatory bodies and stakeholders across the resources sector.

Meanwhile, Goncalves had called on the mining industry to take more responsibility for their operations and actions in the wake of the November Samarco incident, in Brazil.

“The Samaro event is a wake-up call that we need to take very seriously,” Goncalves said.

“This is not a cash cost per-tonne business, it is a mining business and it affects a lot of people, communities, the environment, farm land, water supplies, and we have to be responsible for that.

“This is not a cash-cost business, no matter how many times you guys are being exposed to the lies that the mining industry is a cash-cost business.”