Australia must ‘back BHP’ in China ‘fight’: opposition

Australia must “back BHP” after China reportedly banned iron ore shipments from the country’s biggest miner, an Opposition frontbencher says.

Bloomberg reported this week that the Chinese state-run entity that buys iron ore froze BHP shipments after pricing negotiations stalled.

BHP has refused to confirm or deny the stand-off, but both the Albanese government and the Coalition have expressed their concern.

Opposition finance spokesman James Paterson on Thursday called for the government to get involved.

“Iron ore is obviously Australia’s largest export and one of the single biggest contributors to the federal budget bottom line,” he told Sky News.

“Nothing is more important, in fact, for a surplus and deficit in some financial years than the iron ore price, and so if our Chinese partners are using attempted leverage to try and drive down the price and underneath a competitive international market price, then that would be very concerning.”

Senator Paterson said it was not “good enough for the federal government to take a hands-off attitude”.

“We should remember that the counterparties that BHP are dealing with are not strictly commercial in the sense that they would be in a free-market country like Australia,” he said.

“They’re either state-owned entities or heavily influenced by the Chinese government, and I think we have to back BHP in this fight.”

Australia is the world’s largest producer of iron ore.

It accounts for more than 20 per cent of the country’s total exports and is projected to be worth $116bn in 2024-25.

China is Australia’s biggest market, with Australian ore fuelling ravenous Chinese steelmakers as they have in turn tried to keep up with a once-insatiable construction industry.

A shock slump in China’s property sector has reduced demand, leaving steelmakers desperate for alternative customers.

Anthony Albanese on Wednesday said he was “concerned” by the apparent stand-off and said he wanted it “resolved quickly”.

“I want to see Australian iron ore be able to be exported into China without hindrance,” the Prime Minister told reporters.

“That is important. It makes a major contribution to China’s economy but also to Australia’s.”

Asked if he was disappointed by China’s stance given his state visit there in July, Mr Albanese said: “Well, these measures are always disappointing, but let’s hope, certainly, that they are very much short term.”

NewsWire has contacted Trade Minister Don Farrell’s office for comment.

More to come