Colin Barnett: BHP, Rio Tinto corporate play «dumb»

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watoday – West Australian Premier Colin Barnett* says BHP Billiton and Rio Tinto's decision to flood the iron ore market is a "dumb" corporate play.

The iron ore price is at a six-year low after falling to around $US55 per tonne overnight.

The price of the steel-making commodity has halved over the past year as Australia's biggest iron ore producers – BHP, Rio and Fortescue Metals Group – boost production to China.

Mr Barnett told ABC Radio on Thursday that BHP, Rio and Brazilian mining giant Vale's decision to flood the market to drive down prices was a "fairly unhealthy exercise".

But the Premier said commodity prices were cyclical and iron ore would climb back at some point.

"(It's) one of the dumbest corporate plays I've ever, ever seen," Mr Barnett said.

The fall in iron ore price is hurting higher cost local junior iron ore miners, with WA's Karara Mining the latest casualty.

The Perth-based producer has announced it will cut 70 jobs at its mine and port operations and head office, comprising 15 per cent of its total workforce.

 

* Colin James Barnett is an Australian politician who is the 29th and current Premier of Western Australia in his role as leader of the Western Australian Division of the Liberal Party of Australia.