Former RIO man: ACCC should stop iron ore flood

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You have to laugh at this:

Former Rio executive Mal Randall said the move by iron ore majors to increase production at a time the market is oversupplied should be investigated by the ACCC.

…Randall said more mining houses should voice their concerns publicly…“There has to be more voices on what is happening at the moment. I’m surprised that some of the managing directors and chairs of these companies are not out there talking about this,” he said.

“The loser is going to be Australia. They need to stand up and point the finger at BHP and Rio and not accept the reasons why they are flooding the market.”

Randall rubbished rhetoric by the majors that more tonnes of iron ore would soon push high-cost Chinese producers out of the market.

“If Beijing has a choice between subsidising and unemployment, it’s going to be subsidising,” he said.

“There are probably some good opportunities for Chinese steel mills to start looking in Australia. I don’t think they will allow a scenario to develop where there is only Rio, BHP and Vale.”

The juniors expanded too. Are they going to be asked to cut supply? If the Chinese or ACCC enter the market to support the juniors then they will expand supply and the price will still fall. What does Mr Randall suggest? A giant Australian iron ore cartel headed by Rod Sims?

Maybe others aren’t speaking up right now because they’ve thought this through a little more.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.