Australia Considers Mining Cartel to Counter China Ore Pricing

A trade dispute has emerged between Australia and China as iron ore prices dropped 16% over three months to $93 per ton. The China Mineral Resources Group (CMRG), a government-controlled buying agency, has moved away from free-market procurement to pressure Australian miners for lower costs, specifically targeting BHP and Fortescue by banning certain lower-grade ores.

In response, Australian mining companies and government officials are considering the formation of a sellers' cartel to pool resources and counter the CMRG's tactics. While such an agreement would typically violate anti-monopoly laws, former Australian treasurer Joe Hockey expressed support for companies collaborating to address these market failures.

Fortescue executive Andrew Forrest urged the CMRG to negotiate fairly as the industry grapples with the aggressive procurement strategy. The Parliament of Australia is currently reviewing the situation, weighing the need to protect national mining interests against existing competition laws.