BHP Billiton's chief executive Andrew Mackenzie has labelled the idea of a parliamentary inquiry into iron ore prices as "a ridiculous waste of taxpayers' money".
The Federal Government is considering an holding an inquiry after smaller mining companies complained that BHP Billiton and Rio Tinto are deliberately driving down prices by expanding production and talking about oversupply.
Mr Mackenzie said holding an inquiry would be damaging for Australia because it would create uncertainty and costs while not revealing any new information.
"This is a ridiculous waste of taxpayers' money on providing a basic economics course on supply and demand," he told Fran Kelly on Radio National Breakfast.
"It is something that will be an additional burden on the backs of business to distract us from growing profitability and paying more taxes, red tape pure and simple."
Mr Mackenzie also said an inquiry would send the wrong message to the countries that purchase Australia's resources.
"The alliances that are in place for the supply of iron ore would shift primarily away from Australia towards Brazil, where this week the Premier of China is there talking about investment in Brazilian infrastructure," he said.
"It would be an amazing gift to our major competitor Brazil."
Last week, Prime Minister Tony Abbott suggested to broadcaster Alan Jones that he was in favour of holding an inquiry into the iron ore sector to make sure there was no "predator behaviour".
However, speaking on AM this morning, Industry Minister Ian Macfarlane indicated that he does not see the need for a parliamentary inquiry.
"No decision has been made to have an inquiry and no one in the government wants to regulate the iron ore market," he said.
"There are claims and counter claims and that's what the ACCC [the Australian Competition and Consumer Commission] is there for. They can look at those claims and we'll continue to monitor the situation."
Mr Mackenzie said some of the claims by Fortescue Metals founder Andrew Forrest defy the facts.
"In 2006 the price of iron ore, relative to today, was about 20-25 per cent lower, at that time Fortescue was more than prepared to invest," he argued.
"We know have a price that is actually 25 per cent higher than it was in 2006, at the same time we have worked very hard so our costs are about 30 per cent lower.
"We're producing at a higher margin, it's a more profitable business and we're producing two-and-a-half times more than we would have done in 2006."
Mr Mackenzie was also quizzed about the taxes paid on those profits, given recent revelations that the company transfers a large chunk of its earnings through the low-tax jurisdiction of Singapore.
"All that we're discussing is plus or minus 1 per cent on an annual tax bill that we pay - we're by far and away Australia's biggest tax payer - between $8-10 billion," he responded.
Although BHP Billiton includes royalties as taxes in these figures, even though they would be more accurately described as a fee the company pays states to purchase resources owned by them.
Source: ABC
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