China calls for boycott of Australian iron ore miners

Linda Mottram, Canberra

Last Updated: Mon, 5 Apr 2010 16:40:00 +1000

Australia's government has declined to comment on a Chinese call for a two-month boycott of iron ore purchases from the world's three top miners, including Anglo-Australian firms Rio Tinto and BHP Billiton.

The call follows the biggest change in iron ore pricing in forty years, forced by the major miners.

The Chinese report says the China Iron and Steel Association has urged the boycott in protest at what it claims is a price monopoly by the big three iron ore miners, Anglo-Australian firms Rio Tinto and BHP Billiton, and Brazil's Vale.

It follows agreement by other key Asian buyers to up to one-hundred per cent iron ore price increases for three month deals for their product. It signals an historic shift away from China's preferred annual benchmark price.

Australia says boycott 'unlikely'

Australia's Federal Trade Minister, Simon Crean, says he doesn't believe there's a monopoly.

"You've got to let the market determine the price you can't be issuing directives in terms of restricting supply."

But he says if China's serious it should seek market based remedies, like helping to improve efficiency and iron ore supply from Australia.

"That's the way you get the balance back between demand and supply. To simply try and do it through central edict defeats the whole purpose of functioning as a market."

Mr Crean says a boycott is unlikely because demand in China is so high.

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