BHP ‘Conscious’ of Squeezing Smaller Miners

West Australian Premier Colin Barnett insists major iron ore miners are squeezing smaller producers out of the market, saying BHP Billiton has admitted as much.

Since Mr Barnett last week said the company and fellow mining giant Rio Tinto were “flawed in trying to manage the world price of a commodity”, he’s been grilled about it in parliament and by the media.

And on Wednesday, Rio Tinto chief executive Sam Walsh said he did “not know where Colin is coming from given we’ve been very clear in our plans”.

“Some of the people who were criticising that were cheering from the sidelines when we were bringing on projects and making major investments,” Mr Walsh said.

The brouhaha continued on Thursday, when Mr Barnett said he had initially raised the matter in response to BHP Billiton iron ore president Jimmy Wilson saying the majors were producing iron ore more cheaply as they got bigger – and tough luck for the little guys.

“It’s a tough old world out there and we have to do what we do for our own business,” Mr Wilson said last week.

“To the extent that this impacts on others, such is life.”

Mr Barnett cited that comment in parliament, saying he didn’t want to see iron ore production in WA return to a duopoly.

“By their own admission, the major companies are pushing increasing volumes on a month to month basis into the market, very conscious that is contributing to price falls in an already depressed market and very conscious by those quotes as an example of the impact this will have on smaller iron ore producers,” the premier said.

“It is their decision to flood production onto the market at a time of low price. That is what is happening.”


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