BHP Billiton says an inquiry into the Australian iron ore industry is unnecessary.
Speaking on ABC radio this morning, BHP Billiton CEO, Andrew Mackenzie said an inquiry would send the wrong signal to international customers about the country’s commitment to free trade.
On Monday Australian Prime Minister Tony Abbott said that the Australian Senate was considering an enquiry into the iron ore sector but added that government would not attempt to regulate the market.
He also said BHP Billiton supported Australia’s focus on trade and competition as drivers of growth and was committed to playing a role in improving the nation’s competitiveness. He noted Australia’s reputation as a global policy leader on trade issues.
“I believe that free trade is absolutely critical for the future of Australia and its place in the world. It’s good for the world economy and it’s good for geo-political harmony when people feel that they can count on Australia for the supply they need to grow.”
He said an inquiry would be an “amazing gift” for Australia’s competitors, given iron ore is a globally-traded commodity with other major sources of supply around the world in countries such as Brazil, South Africa, India and China and reiterated that BHP Billiton’s strategy was rational, commercial and responsible with the company anticipating, and stating on many occasions, that supply growth would exceed demand growth.
He said BHP Billiton acted early and deferred around 180 Mtpa of growth opportunities in 2012 – 110 Mtpa from the Outer Harbour Development and 70 Mtpa from two additional berths not taken up in the Port Hedland inner harbour.
In line with comments by the Australian Competition and Consumer Commission, Mackenzie said an inquiry would conclude the global iron ore market was operating according to market principles and no intervention was warranted. “I am very confident if an inquiry goes ahead that we will see this as a well-functioning market which is in the interests of both customers and suppliers,” he concluded.