Michael Potter tries hard, as have many other commentators, to defend the idea of an iron ore price inquiry on the grounds that it will expose the faults in the Andrew Forrest claims. The trouble is, the idea that BHP and Rio colluded to drive the price down is so ridiculous that it’s hard to keep a straight face while debating it. Let me make a suggestion. Before participating in the proposed inquiry the proponents of controlled production levels should be required to apply their arguments to all exporting sectors and present the future strategies that every such business should now develop in order to avoid the kind of price falls we have seen for iron ore (and, by the way, to encourage new entrants into their fields, which is what Forrest ought to support). That exercise would immediately expose how bereft of logic their claims are. And another thing. If proponents of production controls were consistent, then they should have started shouting while prices were rising and absolutely everyone, including Mr Forrest, was cheering on the huge investment the miners were making to increase production. They didn’t complain then and they shouldn’t now.

While I don't disagree with the author, an inquiry would seen as supporting, giving some sort of credence, to the wild claims of Andrew Forrest. Economists have been warning for well over a year that the next step in the minerals boom that we've just gone through would be a production boom, and that's what's happening.

Parliamentary inquiries should not be undertaken lightly. There should be a reason for them. To debunk the claims of a businessman caught out by the market is not a good enough reason.

Only those with something to lose?
Rhrosty.

“An inquiry would particularly enable an examination of the obvious contradiction in Mr Forrest’s arguments. He is accusing BHP and Rio of collusion to drive down prices; and his solution to this is collusion to drive up prices. He opposes collusion that harms Fortescue, and supports collusion when it benefits Fortescue. What a surprise.”

Consistent with supply and demand theory, it would be rational to restrict supply in a market where prices have fallen sharply, so as to minimise the prospect of further price falls.

As Alan Kohler commented about BHP and Rio in The Australian on 19 May 2015:

“ It’s pretty clear that their response to the 2014-15 iron ore price decline has been very different to their response to the price collapse that happened at the end of 2008. Back then, they cut production sharply; this time they almost doubled it. “

Given that the big two’s market behaviour is comparable to loss leading – the BHP CEO admitted that major Brazilian competitor Vale was forced to stop production in certain mines that became uneconomic-- it is surprising that the head of the ACCC limited his remarks to stating that there was no evidence of collusion. Surely, BHP is not implying that it is pure coincidence that the production of other Australian iron ore suppliers has been similarly adversely affected.

Furthermore, such behaviour has hardly been in the best interests of Government, shareholders and the economy.

Do you want the Aussie mines to not make back market share when they can? At times you reap big profits, at others you defend your market. Continual profit taking means death in 10 years.