Australian senate vote for probe into iron ore slump postponed

(Repeats story published Thursday; no changes to text)

By Sonali Paul and Matt Siegel

MELBOURNE/SYDNEY, May 14 (Reuters) - A leading independent senator in Australia has pulled a vote that could have launched an inquiry into the economic impact of a slump in the price of iron ore, just as a campaign against top producers Rio Tinto (Xetra: 855018 - news) and BHP Billiton (NYSE: BBL - news) was ratcheted up.

Senator Nick Xenophon wants an inquiry into the impact of the price collapse on government revenue and to consider whether action is needed to ensure healthy competition in the sector.

He had planned to call for the vote on Thursday but postponed it to June 16 as he did not have enough support, including from opposition Labor politicians, on the scope of the inquiry.

"There are urgent negotiations under way for an alternative parliamentary inquiry," Xenophon said in a statement.

The iron ore price hit $46.70 a tonne in April, its lowest in a decade, although it has picked up to around $62 this week.

Top producers Rio Tinto and BHP have been flooding the market with iron ore, which has left smaller, high-cost producers struggling to survive.

Xenophon's call for a probe coincided with the opening of a new front in a long-running campaign by billionaire Andrew "Twiggy" Forrest, founder of Fortescue Metals Group, Australia's no.3 iron ore producer, against bigger rivals Rio Tinto and BHP.

Fortescue has created a website called Our Iron Ore (www.ourironore.com), looking to drum up support for his war on Rio and BHP, the world's second- and third-largest iron ore producers respectively.

"Iron ore is Australia's most important single export earner and a dramatically falling price is putting significant pressure on current and future living standards of all Australians," the home page says under the tag: "Damaging our economy".

It echoes what Forrest has repeatedly said this year, without naming BHP and Rio Tinto. "Multinational companies are failing to act in an economically rational way, choosing to oversupply the iron ore market in the medium term," it says.

The site urges the public to "join the campaign" by signing a petition, but a link does not lead to any petition so it is unclear what people would be putting their name to.

Rio and BHP declined comment on the website. Rio Tinto Chief Executive Sam Walsh called Forrest "harebrained" in March for suggesting producers should collectively cut production to shore up prices, but BHP has avoided comment.

One crisis management expert said it would not pay for them to fuel the story by overreacting to Fortescue.

"There are two games being played here: one is the sort of vaudeville show at the front end but the more important one is going on behind the scenes," said Tim Allerton, managing director of Syndey-based City Public Relations, the latter referring to lobbying on the matter in parliament. (Writing by Sonali Paul; Editing by Alan Raybould)