What I'm advocating is what a corporate Marketing Manager is employed for: that is to make as much money as one can except that is from the point of view of the respective States who have soverign ownership of all onshore minerals & natural resources within their jusrisdictions.
The secondary consideration is how can Australia as a country achieve optimum value forthese resources for its citizens.
In summary, the general public interest.
When there has been snags with seabourne supply of Iron Ore & Coal due to weather, shipping , los of a mine's production etc, the price has invariably gone up. Conversely whan there has been a spike in demand such as from China 2009-2012 due to China's domestic stimulus the price has gone up. While these cycles are managed by miners , shippers and customers , our State & Commonwealth Governments have been reluctant to intervene. The Brazilian Government proposed to cap production of Iron Ore in 2010 so that a premium price could be achieved but that was quickly scotched by Vale and others. The objective here was similar to what OPEC has achieved for decades: to match production with demand to achieve optium return for Opec Member countries.
Whay can we not do that with Brazil in Iron Ore & with Indonesia and the USA in coal? IMO, the reason is that many of our politicians are beholden to the miners who like Frank Sinatra want to do it "Their Way"
Unfortunately the Chinese Government intervenes in minimising the country's cost of Iron Ore & Coal imports by nationally co-ordinating demand from the mills , stockpiling and other strategies. And what may I ask you what our Government does? I can tell ya...diddly squat !
Immediately post the GFC the Chinese, Japanese & Koreans poured billions into coal & Iron Ore mining (Chief financiers of the emerging FMG) for the sole purpose of oversupplying the market and knocking the ass out of price,. In 2008 when it was RIO's turn to provide estimates of future demand for Irion Ore,, China jailed 7 RIO researchers on the charges of stealing Chinese National secrets . Both BHP & RIO transferred their market research team to Singapore.
The bottom line here is that our chief customer China, orchestrates and manages its import of iron ore & coal ( remember the hold ups of coal shipments to Dalian Ports last year to provide a glut of seabourne coal & knock the ass out of price).
And what do we do as a country to look aften rnatonal economic interests; we farm that out to BHP & RIO who diddle us for tax by channelling product through Singapore . Great gig if it lasts eh?
