Australia’s government has rejected calls by Fortescue Metals Group Ltd. and an independent lawmaker for an inquiry into the iron-ore market and the fall in prices.
Fortescue Chairman Andrew Forrest proposed a study into the steelmaking material’s price collapse, while Prime Minister Tony Abbott initially expressed support.
“After discussing the issue with regulatory bodies and stakeholders across the resources sector, the government will not be initiating an inquiry at this time,” Treasurer Joe Hockey said Thursday in an e-mailed statement.
The largest suppliers are expanding lower-cost production that’s squeezing out competitors and adding to a glut around the world as economic growth slows in China, the largest buyer.
“This denies the Australian people the opportunity to a shine light on the iron-ore industry and to understand whether it has been operating as an open market in which producers act to maximize the value of the resource for our nation,” Forrest said in a statement following the government decision.
BHP Billiton Ltd. and Rio Tinto Group both rejected the idea of an inquiry and warned that it risked undermining the country’s commitment to free trade and open markets.
“We thank the government for its consultation across the industry and we welcome the decision,” Andrew Mackenzie, BHP’s chief executive officer, said in an e-mailed statement.
Rio didn’t immediately respond to a request for comment.
“This issue won’t go away,” Nick Xenophon, the independent senator who initially called for a study into the strategy of Australia’s largest iron-ore exporters, said on Thursday in a phone interview. “I’ll consider my moves, and my colleagues know how pesky and persistent I can be.”