FORREST PLAYING A DANGEROUS GAME ON IRON ORE
Fortescue Metals chairman Andrew Forrest is playing a dangerous game pushing for the Federal Government to direct his competitors on how to run their mining businesses in Australia.
Mr Forrest's call for government to remove the ‘license to operate’ for some miners sets Australia's on an interventionist path.
There is no role for government in ‘managing’ the iron ore market.
A government direction to reduce Australian output would have a damaging impact on the iron ore sector and on Australia’s reputation as a reliable supplier and as a secure investment destination.
It would represent a giant free kick to Australia’s competitors. Hard-earned Australian market share in the seaborne iron ore trade would be given up.
Export dollars that would have flowed to Australia would instead go to Brazil and other iron ore exporting nations. And one thing we know from commodity markets is that once given up market share is very difficult to win back.
The Forrest view that Australia can effectively set the iron ore price is simply wrong.
It is important that the Federal Government maintain its commitment to free and open markets and ensuring that Australia remains ‘open for business.’