Hockey bearish on iron ore forecasts

The Australian government's new iron ore price forecast is lower than that of most pundits, including its own taxpayer-funded commodities expert, according to the Australian Financial Review.

Treasurer Joe Hockey's budget was based on the nation's most important export commodity, iron ore, fetching $US48 a tonne over the next 12 months, excluding the cost of shipping to China.

Larger than expected falls in the price for iron ore, and other commodities, have destroyed revenue targets in the past three federal budgets, and the Abbott government has taken very conservative forecasts in a bid to avoid more budget pain.

Rio, BHP again take knife to capital spend

Rio Tinto has indefinitely shelved its planned $1 billion new mine in the Pilbara and ruled out committing new capital for its controversial iron ore expansion, as rival BHP Billiton slashed its capital expenditure guidance for the second time in three months, by another $US1.8 billion ($2.2 billion), according to the Australian Financial Review.

Both the majors on Tuesday recommitted to their ultimate iron ore expansion targets, and said they could be reached more cheaply than first thought but not necessarily more slowly.

Xenophon calls for Senate probe into BHP, Rio

Independent Senator Nick Xenophon will call for an urgent inquiry into Australia's $57 billion iron ore industry, which could trigger tougher rules governing Australia's biggest miners, BHP Billiton and Rio Tinto, according to the Australian Financial Review.

In a coup for Fortescue Metals Group, Xenophon, who sits on the powerful economics committee, is drafting the scope of an inquiry that he will put to a Senate vote on Thursday.

“I want to look at the economic impact and the implications in terms of the budget,” he said.