From The Australian:
A Chinese industrial group has urged domestic steel companies to stop buying iron ore from the world’s top three miners, including Australia’s Rio Tinto and BHP Billiton, in protest of an alleged price monopoly, state media says.
The China Iron and Steel Association has asked domestic steel firms and traders not to import iron ore from Rio Tinto, BHP Billiton and Brazil’s Vale for two months, the China Net, a government news website said.
The association called for the boycott on April 2 as the most effective means to fight the “monopolistic behaviour” of the three iron ore giants, the report said.
The Rudd Government, economically-led by (unelected) Treasury secretary Ken Henry, are banking on another China-fueled mining boom to bring the budget back to surplus. In fact, Ken Henry has predicted a “period of unprecedented prosperity”, possibly stretching to 2050, thanks to his belief in a continuous 4-decade China Miracle.
Many leading economists believe that China is in a massive bubble. Some believe it will burst within ten years… others believe by 2012.
Whoever is right, this latest event makes it clear that China is flexing its economic muscles. Barnaby Joyce’s warnings about changes to the Foreign Investment rules by Rudd Labor only appear more prescient in light of these developments.
Barnaby Is Right 
It is inevitable that the huge rise in iron ore prices must create jealousies, enmities and plans for retaliation. Retaliation by way of sourcing supplies elsewhere or even ceasing purchases for a short period would quickly collapse the Australian economy, which in turn would collapse the Australian price for future supplies of iron ore. The incentive is there and the incentive is strong. Australia beware!