Lack of reliable iron ore data affects public criteria according to Australian PM
The reasons and causes about the iron ore prices critical fall are not really clear yet. There’s too many doubts between public officials and mining businessmen. The past few years, the Australian government has done several campaigns against the exportation growth of the iron ore, but it really didn’t stop, just slow down.
Mr. Tony Abbott demanded reliable data about the activities of this industry, but his demands weren’t listen at all. An already planned inquiry for this industry was canceled because possible “aggression” to potential trading partners inside the business. This excuse made up to weaken the inquiry to the final stage of cancellation.
In the meanwhile, Mr. Andrew Forrest, iron ore billionaire, declaring for AFR Weekend that he received a warning from an international source, who informed him about the collapse of the price. His international source, who remains anonymous, even said the future price of the iron ore, positioning it below the US$ 40 per ton mark.
The billionaire businessman is sorry about the cancelation of the iron ore industry’s planned inquiry. “I think iron ore as an industry is opaque. (…) I think there’s insufficient transparency and clarity into it”, he said. He also stated that the Australian government lost a great opportunity to get reliable and clear data about the industry and, in that way, have a better perception for choice-making situations in the near future.
Still plenty of experts pointed the low demand at Asian markets as the main factor of this severe drop. Now, the federal budget has a relevant problem with a hole of $30 billion in it. Political actions must be taken in favor of raising the prices with what they have on hand. Prime Minister, Mr. Abbott, insists on the inquiry. He also criticized the hesitancy of the government to regulate this particular sector of the Australian economy.
PM considers that is vital to the country to get consistent and trustworthy information about the mining business in Australia because represents one of the main industries that have a serious impact on tax revenues and employment. With that argument, Mr. Abbott continues to demand a deep investigation. “It is important to know what’s happening in the iron ore sector, there are claims and counter claims being made at the moment”, he said.
An accusation against Rio Tinto and BHP Billiton were also made by the Australian Prime Minister, who claims that these mining enterprises are over supplying the market with the intention of eliminating smaller rivals. The data resulted of an inquiry in this scenario could be the answer of all these doubts. Despite this, Mr. Abbott stated that the demanded inquiry, in the case of being executed, can’t be a “witch-hunt”, a violent investigation against any particular company or group of companies. Instead, it must be a fair inquiry
Private accusations
The magnate of the mining industry, Mr. Forrest, has accused the Australian Prime Minister to allow the lobbies to make the sufficient pressure to cancel the inquiry for the iron ore market and the productive sector. And he insisted: “It appears the intense lobbying and wishes of the multinational mining giants has prevented a formal inquiry into the iron ore industry. (…) I understand the intensity of the lobbying by the multinationals has been unprecedented. It has to be asked, what could there be to hide to unleash such intense activity?”
These statements make very clear the lack of trust that Andrew Forrest have on his mining rivals. He also mentioned the self-harm occurring in the iron markets caused by major miners, destroying thousands of jobs and inflicting in the profitability of the business. Mr. Forrest maintains his position of publicly denounce the issue across Australia and keep demanding the inquiry in the sector.
The media has been speculating about who were the lobbies that convinced the federal government to not run the inquiry. Gina Rinehart, the billionaire miner, is being aimed as one of them. Mr. Abbott was asked about this in a recent chance. “I have had various conversations with various people over months and months about our iron ore industry. We haven’t made a decision about an inquiry”.
Besides this declaration, a spokesman for Hancock Prospecting, the Gina Rinehart’s mining company, stated that arguments about she or her enterprises were false and denied the relation with the inquiry dissolution. With this, Australians are still figuring out about the characters participating in the cancellation decision. Mr. Joe Hockey, Treasurer of the federal government, stated that it’s not the time for an inquiry. “After discussing the issue with the regulatory bodies and stakeholders across the resources sector, the Government will not be initiating an inquiry at this time.” he said.
A possible inquiry in the future now depends on the pressure applied by the Australian people plus the support of one of the major mining businessmen in the country. Became obvious that there is some problematic data that is getting covered by other companies and part of the politicians. Maybe some of the truthful causes of the actual price issue.