Barnett told reporters in Perth yesterday that not going ahead with an iron ore inquiry had preserved WA’s reputation in China.

“I don’t think it was a well-founded proposal,” he said, despite being at an FMG event.

“It’s a big industry, they’re big players and they can look after themselves and I think to have had an inquiry would have been pointless.

“Let’s face it, the iron ore resources are owned by the state of Western Australia. What could a senate inquiry actually do? They don’t own the resource, they don’t charge for the resource.

“If there is any evidence of collusive behaviour or anti-competitive behaviour, that should be referred to the ACCC or to the Productivity Commission perhaps, or to an international body, but I don’t see any evidence of that coming forward.”

FMG chief financial officer Stephen Pearce refused to comment on potential talks with the Chinese, but Barnett said he had always encouraged the Japanese and Chinese to invest as long as Australian ownership remained strong.

Barnett said the government was in constant dialogue with China’s National Development Reform Commission.

“And while some of the heat has certainly come out of the iron ore market, China still is a massive producer of steel and it will grow, though at a slower rate, and then you’re getting other markets coming in – India, which is trebling its steel production between now and the end of the decade,” Barnett said.

This week the government started acquiring land for the Anketell port project in the Pilbara, which could be developed as part of Baosteel Resources, AMCI, POSCO and Aurizon Holdings’ West Pilbara iron ore project.

Despite a delay to the West Pilbara iron ore project, Barnett is confident Anketell will go ahead.

“The major participants are backed by Baosteel, the most prestigious steelmaker in China, and they look long-term,” he said.

“Because the iron ore price is low by recent standards does not mean that major organisations like Baosteel will resist the temptation to invest.

“They are looking 20, 30, 40, 50 years into the future.

“Anketell, I’m not suggesting it’s going to happen tomorrow, but it will certainly develop during this decade.”

Barnett said the government liaised with the project partners on a two or three weekly basis, but the state would not be putting equity in.