PM backs iron ore probe call
Tony Abbott has backed calls for an inquiry into competition in the iron ore sector but there are warnings any probe could undermine international confidence in the free market.
With plummeting iron ore prices wreaking havoc on Federal and State government coffers, Mr Abbott said he did not want to see "predator behaviour" by companies.
Smaller miners including Andrew Forrest's Fortescue Metals Group have accused Rio Tinto and BHP Billiton of flooding world markets with iron ore in a bid to kill off higher cost competitors.
Mr Forrest is understood to have been lobbying heavily for the Government to step in.
This month, he avoided investigation by the competition regulator for engaging in cartel behaviour after he suggested companies cap iron ore production to drive up prices.
Independent senator Nick Xenophon, who has been in talks with Treasurer Joe Hockey to establish a parliamentary inquiry into iron ore pricing, claims Rio and BHP have been furiously working behind the scenes to kill off any government probe.
Mr Abbott said he believed there was a need for an inquiry but he was conscious Rio and BHP were Australia's biggest corporate taxpayers.
"I want them to continue paying a lot of tax here in Australia and I want them to continue making a lot of profits here in Australia but, certainly, I think we do need to know the facts of what's going on here, because I am conscious of the claims that are being made by Andrew Forrest and others," he said.
While the Government is set to back some form of inquiry, it is opposed to any investigation being chaired by Labor's Sam Dastyari, fearing he will use the event as a publicity stunt.
Government insiders are wary that an inquiry will send a terrible signal to international businesses that Australia will interfere in free markets.
A well-produced website has sprung up under the banner of "Our Iron Ore", urging Australians to join a campaign to put pressure on big miners.
There are questions whether the site is a technique called "astroturfing" - planting messages to give the illusion of a grassroots campaign.
