AWU makes gig of itself supporting Twiggy

From the Herald Sun today comes  real clangor from Scott McDine, national secretary of the Australian Workers’ Union:

RIO Tinto and BHP Billiton are today two of the largest and most powerful multinational corporations the world has ever known.

So maybe we shouldn’t be too surprised when they decide to run an aggressive strategy of using their size and scale to drive down the price of Australia’s most valuable export, iron ore.

These mining giants figure they can simply absorb the pain of crashing iron ore prices for now, and use it to crush all competition. They want to establish a cosy little Coles-Woolworths duopoly in the market and jack up their future profit potential.

It’s known as predatory pricing and in this case looks suspiciously like cartel behaviour.

…Bosses need to be called before our national representatives and forced to explain why they are driving a strategy that hurts our economy and everyday Australians.

The lunacy of this position is laid bare. Even in its own terms this argument makes zero sense: BHP and RIO are trying to consolidate the market so that they can raise “future profit potential”. In other words, they’re maximising Australia’s long term profits from iron ore, which is in our interests, wait no…

I prefer to see this as just a part of the overall giant blunder that every miner has made in over-expanding production into a Chinese bust, and the only way out is down to clean out the ponzi miners, before rising again.

Houses and Holes
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  1. With few talking about an Oz-Brazil-Guinea (thanks WW for suggesting it needs to be a triple play) organisation of Iron Ore Exporting Countries (IOEC) Comrade Colin should start doing the next best thing and ramp up royalties on Iron Ore until the pips squeak!

    With all that sunk CAPEX (and no more in the pipeline for decades) his window of opportunity is now.

    Every day that goes by is likely to see Iron Ore prices sink a little lower and the task of extracting juicy royalties more difficult.

    The politics are much simpler as well.

    How many Western Australians are going to complain about the State getting a bit more of the proceeds of flogging off chunks of the North West.

    Come on Comrade Colin – all it takes is a few regulations. A few whiney miners rabbiting on about ‘sovereign risk’ don’t scare you surely?

    They can hardly take the ore and their shiny new rail systems and loading facilities with them.

    The unions should support Comrade Colin in this exercise as strange as that may feel.

    • Perhaps they were deemed to the charity at the on-set as a way of getting it going/provide some cash-flow dividends, and weren’t bought at all?

      • Yes of course, I do realise that possibility. Need to investigate a little more.

        He has a great charity, this is just curiosity and not a cheap act of tarnishing the man or his charitable works. keep digging for info.

      • * my bad…
        Between March 2013 and September 2013 the foundation showed up as a major shareholder. Just an act of a charitable man. Nothing to see here.