The federal government of Australia has told Beijing to stay out of sensitive iron price talks between Chinese steelmakers and Australian miners amid a report Premier Wen Jiabao has been asked to personally intervene.
Mr Simon Crean Australian Trade Minister told reporters that "We recognise China's market economy status, all we ask in return is that it acts in accordance with market principles.”
Mr Crean said that Chinese steelmakers locked in talks with Australia's two biggest iron ore miners, Rio Tinto and BHP Billiton over pricing of hundreds of millions of tonnes of ore for delivery over the next 12 months "should not seek to get government involved.”
Mr Crean said that "The iron ore negotiations are always going to be robust negotiations adding China was helping ease supply shortfalls by investing in local iron ore mines.” He added that "There are a number of ways this issue can be addressed, but it won't be addressed by governments intervening in the marketplace. We reject that.”
Mr Crean said the matter had been discussed in the past with the Chinese government, although the subject had not been raised at more recent meetings between the two countries.
He added that "As for the steelmakers, in terms of them being dissatisfied with the way negotiations have been run in the past, the solution doesn't lie in getting the government to intervene. The solution lies in understanding and being transparent and open about what their needs are going forward and being creative in the ways those needs can be met.”
The official China Securities Journal has reported that some major players in China's steel sector which have asked Premier Wen Jiabao to direct the government to tackle iron ore price negotiations. The vice president of the China Iron & Steel Association and the heads of more than 10 mills wrote the joint letter to Mr Wen on March 11, asking him to take up the issue of rising iron ore import prices at a national level, the paper reported, quoting what it described as authoritative sources.
(Sourced from Reuters and www.smh.com.au)
