A rally in the price of iron ore has proved short-lived, with the commodity slipping back below $US50 per tonne.

Iron ore at the port of Qingdao eased US55¢ on Thursday to $US49.78, as for the second day in a row it erased some of the gains it posted earlier in the week.

The fall came as tensions continue to flare over Rio Tinto's and BHP Billiton's strategy of pumping up supply while driving down the price of the commodity.

Gumala Aboriginal Corporation, Australia's second largest indigenous corporation, entered the fray on Friday, blaming Rio Tinto for helping to create a "manufactured crisis".

"We have a perfect storm and it's our view that what this is creating is a destructive outcome for the sector, collateral damage for Aboriginal contractors, lower benefits to traditional owners and Western Australian potentially going to recession in the next 12 months," Gumala chief executive Steve May said.

Embattled Fortescue Metals Group also increased its rhetoric over the actions BHP and Rio, with CEO Nev Power accusing the iron majors or "ripping the heart out of communities" and harming the nation.

"Governments do need to have a really hard look at what is happening in the industry and how they want to manage it going forward," Mr Power said as Fortescue delivered its March quarterly production report on Thursday.

But the CEO's comments came against a backdrop of Fortescue increasing iron ore production, counter to its position that rises in production are 'incinerating' shareholder value.

Goldman Sachs gave stark clarity to the source of Fortescue's anxiety on Thursday, slapping a 'sell' recommendation and 50¢ target price on the stock. Fortescue shares closed Thursday at $1.955.