Mackenzie told ABC Radio this morning that the iron ore industry did not need a probe.

“Not all inquiries are bad … but this one is a ridiculous waste of taxpayers’ money on providing a basic economics course on supply and demand,” he said.

The Fortescue Metals Group-led Our Iron Ore campaign, backed by BC Iron, Atlas Iron and Cliffs Natural Resources, is supporting calls for an inquiry.

Yesterday Prime Minister Tony Abbott said an inquiry would make sense but he did not want a “witch hunt” against any particular company.

“I’m full of admiration for what companies like Rio and BHP have done,” he said.

“I’m very conscious of the fact that Rio and BHP are our largest corporate taxpayers. 

“I want them to continue to flourish, but I also want a level playing field, I want to ensure that there’s no predatory behaviour, I want to ensure that everyone is able to compete freely in an open market.”

But the PM said an inquiry was a good way to “get the facts”.

Mackenzie said he was confident an inquiry would conclude that the iron ore sector was a well-functioning market, but it would be a distraction and an additional burden on business.

“It comes at a very bad moment,” he said.

“It sends a terrible signal to our customers and it flies in the face of the commitments we’ve made at the highest level in places like China, Japan and Korea, that they can count on secure supply from us at fair prices.”

Mackenzie also noted that Chinese Premier Wen Jiabao was in Brazil this week and news of the inquiry could sway China to direct its investment dollars away from Australia.

“This inquiry is very bad for Australia’s competitiveness,” he said.

Rio Tinto Iron Ore CEO Andrew Harding told The Australian Financial Review he was “absolutely stunned” by calls for an inquiry.

"As I keep saying, there is a reality dysfunction. The commercial reality of it all gets overlaid by the claim 'that is rubbish' and 'that is not how it works', but no one ever goes on to explain how it works in the alternative,” he said.

"When you start mucking around with the way iron ore is sold in Australia and dug up in Australia what we see here is we'll send a message of instability to our Asian customers.”