While it is certainly not good news, a fall in the iron ore price to US$50 a tonne or below is neither here nor there when compared with the drop from $US130 to $US70 last year. What’s more, the full effect on the revenues of Australia’s iron ore producers and the Australian economy from last year’s price fall has yet to be felt. We estimate that the cumulative revenues in 2014, 2015 and 2016 will be $11bn (0.7% of GDP) lower than if the price had stayed at US$130.
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