South Australian Senator Nick Xenophon has renewed his call for an inquiry into the cause of the dramatic recent fall in the iron ore price while in Perth today, as shares in the state’s biggest miners continued to fall.
South Australian Senator Nick Xenophon has today revealed the local Senate candidate for his political party Nick Xenophon Team, which is to contest the next federal election, while renewing his call for an inquiry into the cause of the dramatic recent fall in the iron ore price.
It follows his announcement yesterday that psychologist Marie Rowland would contest Tony Abbott's seat of Warringah in Sydney, where he reportedly introduced a three-point plan to alleviate consumer problems with gift card debts like those experienced in the Dick Smith collapse.
The Western Australian candidate is marketing professional Luke Bolton, who will be seeking to unseat one of the three Liberal, two Labor or solitary Greens senators elected in the class of 2010, with senators sitting for six year terms.
Senator Xenophon said he would be writing to federal Treasurer Scott Morrison and Labor's Chris Bowen in the hope of gaining support for an inquiry in the Senate or through the Productivity Commission.
He said similar calls had been made last year by Fortescue Metals Group chairman Andrew Forrest, raising concerns about ‘dumping’ of capacity onto the market.
“I think we need to test the serious assertions, serious allegations made by Mr Forrest, and we can do that through a Senate inquiry,” Senator Xenophon said.
Mr Forrest has consistently argued that the leadership teams of other major iron ore producers were not focused on maximising shareholder value and were instead scaling up production, which would push others out of the market.
Former prime minister Tony Abbott, and (then) treasurer Joe Hockey, initially agreed to an inquiry last year, Senator Xenophon said, and then reneged under pressure from mining industry lobbyists.
“It was killed off when neither the government nor the opposition were willing to stand up to vested interests on this issue,” he said.
“We can’t have our heads in the sand about such a dramatic collapse in the iron ore price.”
He denied claims that such an inquiry could pose problems to sovereign risk, saying they were laughable.
Mr Bolton said he felt that more money from the mining boom years should've been spent on infrastructure and health investment, and that the economy should've been more diversified.
Rio Tinto Iron Ore chief executive Andrew Harding responded to Senator Xenaphon's claims saying that Rio did not and would not manipulate the market.
“We operate in a very competitive global iron ore market that operates freely, like all commodity markets," he said.
"Prices go up and down through the peaks and troughs of the commodity cycle.
“An inquiry would send a dangerous signal to the world about the potential for intervention by the Australian Parliament in a freely operating market.
"If we suspended or capped production, other suppliers around the world would fill the void.
"Australia would lose market share, taxes and royalties.
"Australia would lose if we artificially inhibited production."
Shares in the state’s three major iron ore producers fell in trading today, after the iron ore price dropped US82 cents to $US41.31 per tonne overnight.
BHP Billiton reached its lowest point in a decade, falling 3.5 per cent to $15.01 per share.
Rio Tinto and Fortescue were both 3.3 per cent lower, at $39.15 and $1.59 respectively.
