„Monopoly“ of Iron Ore producers together with speculation could create a new bubble

Iron ore is not a scarce resource but the ore price dominates steel price and a rising steel price – in turn – is a fundamental constraint on the rate of global economic recovery. Production of iron ore is dominated by just 3 players – Rio Tinto, Vale and BHP Billiton – and they are now under investigation by the European Commission and German authorities for building cartels.

The CEO of Thyssen-Krupp accuses them and speculators for jeopardising the economic recovery.

Ekkehard Schulz

“The new pricing system opens the floodgates to speculation and manipulation. A massive bubble is threatening to develop in the natural resources market. Its dimensions could even exceed that of the real estate problem in the United States two years ago.”

This is being compounded by taxation and the opportunistic Australian Resource Super Profits Tax would seem to be a case of shooting oneself in the foot !! A case of greed overcoming common sense perhaps?

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