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Australia tells China not to interfere
in iron ore talks
AFP AND BLOOMBERG, SYDNEY
Sunday, Feb 14, 2010, Page 5
Australia has warned Beijing not to interfere in difficult commercial iron ore
price negotiations and urged China to act as a market economy.
¡§We¡¦ve been consistent in this regard. Negotiations are for the market. We will
not interfere in the market,¡¨ Trade Minister Simon Crean said in an interview
late on Friday.
¡§We¡¦ve made the point to China: ¡¥We have recognized you as a market economy, act
as one, don¡¦t seek intervention from the government when it comes to market
exchanges,¡¦¡¨ he said according to the transcript issued by his office.
Crean was responding to local media reports that a senior official from China¡¦s
industry ministry had met with an Australian embassy official to press the point
that China paid the highest prices for iron ore, despite being the world¡¦s
largest customer.
The trade minister said ¡§all sorts of conversations take place¡¨ on a
government-to-government level, but iron ore pricing was not one that was
regularly discussed.
¡§We are reminded of the size of their market but that¡¦s an important dimension
of our trade relationship anyway,¡¨ Crean said.
China¡¦s Iron and Steel Association in December said it would seek to streamline
the number of importers and their prices in a bid to boost China¡¦s leverage as
global miners sought a 20 percent to 30 percent price hike in what were proving
¡§quite difficult¡¨ benchmark talks for this year.
The talks between mills and suppliers, including BHP Billiton Ltd and Rio Tinto
Group, are underway, the association said last week.
BHP and some steelmakers had agreed to a provisional 40 percent increase in
contract prices, UC361.com analyst Hu Kai said, citing the mills.
China¡¦s relations with the world¡¦s biggest miners ¡X Anglo-Australian companies
BHP and Rio Tinto and Brazil¡¦s Vale ¡X remain tainted by the July arrest of Rio
executive Stern Hu (J¤h®õ) and three Chinese colleagues in Shanghai.
Their detention came during fractious iron ore contract talks which later lapsed
and just weeks after Rio Tinto snubbed a near US$20 billion cash injection from
a state-run Chinese company.
Crean emphasised that Canberra had not sought to have the case dropped against
Hu, an Australian passport-holder, and would not investigate Rio as a result of
his formal indictment on Thursday on charges of bribery and illegally obtaining
trade secrets.
¡§We recognize the Chinese legal system has to run its course, it¡¦s a different
legal system to ours,¡¨ Crean said.
¡§That¡¦s the circumstances in which people go in there to do business or travel
in there,¡¨ he said.
¡§We¡¦ve treated it as a consular case, not seeking to interfere with the course
of justice, only to bring it to a conclusion expeditiously and transparently,¡¨
he said.
There were ¡§no allegations¡¨ against Rio, he said, and therefore ¡§no
justification or reason on the evidence before us¡¨ to warrant an Australian
government probe of the miner¡¦s practices in China.
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