RIO & BHP Warned !

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Western Australian Premier Colin Barnett has delivered a stinging rebuke to BHP Billiton and Rio Tinto, warning moves to boost iron ore production were “flawed” and hurting the state.

A clearly frustrated Barnett said he would “hate” to lift royalty rates in the state to offset falling royalty revenue but warned if the situation continued it may be an issue he would need to address.

“This strategy of the two major producers to flood the market and force the price down, I mean, remember who your landlord is,” Barnett said. “That is hurting Western Australia.”

Barnett said he was so frustrated and angry that he had to announce wide-ranging cuts to the public sector that included 1500 voluntary redundancies because of falling mining royalties and lower goods and services tax revenue.

BHP revealed plans on Monday to boost production by a further 65 million tonnes while slashing costs. It will allow the miner to make more profit on the ore it produces. But the swelling production is depressing global prices.

Glencore chief executive Ivan Glasenberg has criticised BHP and Rio for rapidly increasing production for adding to an oversupply that had helped push prices down 40 per cent this year.


Read more: http://www.smh.com.au/business/markets-live/markets-live-asx-on-fed-steroids-20141009-3hl0z.html#ixzz3FcaY5IrY