Prime Minister Tony Abbott has backed calls for an inquiry into competition in the iron ore sector amid concerns Rio Tinto and BHP Billiton are oversupplying the market to squeeze out smaller operators.
“We do need to know the facts… what we don’t want to see is predator behaviour by any company,” Mr Abbott told 2GB Radio on Friday morning.
The facts are these:
- Chinese steel production is falling and will keep doing so;
- all miners have over-invested;
- the glut is global and huge;
- in such circumstances, you have two choices. Allow a large player cartel to develop with pricing power or force a small player cartel onto the market with no pricing power and a virtually nationalised quota system;
- injecting competition into your export sector only benefits customers.
Hopefully these facts will come to light but who knows in this place.
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