For the second time in five years, Andrew Forrest has been comprehensively out-lobbied, out-manoeuvred and out-muscled in Canberra’s halls of power by his despised rivals BHP Billiton and Rio Tinto.

The billionaire chairman of Fortescue Metals Group is seething at being snookered again by two multinationals he believes are hellbent on pushing him out of business by driving down the iron ore price.

“This won’t be the end of it — he won’t stop now,” said a close �associate of Forrest’s after Joe Hockey bowed to the demands of BHP and Rio by announcing on Thursday that there would be no �inquiry into the iron ore market.

Another was more blunt: “He will keep going — he actually believes his own bullshit.”

Sure enough, at the crack of dawn yesterday, the indefatigable Forrest hit the national airwaves from Perth in a bid to reboot his campaign, suggesting BHP and Rio had sent “plane loads” of �lobbyists to Canberra in recent days to convince the government to call off the planned inquiry.

He insisted an inquiry was needed to “shine a light” on why the iron ore price has fallen by 60 per cent in the past year, depriving Australians of precious tax revenue and endangering thousands of jobs.

Forrest is at the centre of this pitch but it’s not quite a one-man show. The Weekend Australian can reveal that the campaign — including the schmoozing of MPs and media personalities along with the website and Twitter and Facebook pages — is being driven by the Liberal-linked lobbying firm Crosby Textor.

The success of the big miners this week in avoiding an inquiry revives memories of their spectacular victory over Forrest during the mining tax debate of 2010.

Then and now, Forrest wrapped himself in the national flag, turned on his trademark charm and brazenly declared he was acting on behalf of “Aussie battlers”. And both times he managed to come within a whisker of success by employing the brilliant salesmanship and audacity that have defined his career.

Yet in both debates, Forrest was left to lament the hard truth: BHP and Rio have more power than he does in influencing public policy in Australia.

Five years ago, Forrest was on the verge of negotiating a secret deal with Kevin Rudd to reshape Labor’s resource super-profits tax in a way that would have benefited Fortescue more than any other company. But just as Forrest prepared to open the champagne, Rudd was deposed by Julia �Gillard, who decided to deal only with Rio and BHP.

Forrest was livid, accusing the big miners of negotiating a new levy — the minerals resource rent tax — that suited themselves at the expense of smaller companies.

As anyone who has worked with him will attest, Forrest never gives up. He embarked on a three-year crusade to kill the MRRT, taking the fight all the way to the High Court where he eventually lost. This time, Forrest came agonisingly close to convincing Tony Abbott and Joe Hockey to set up a formal inquiry into iron ore.

Forrest had been working on Abbott and Hockey for some time, establishing strong relations though his philanthropic work and chairing the government’s welfare review last year. Notably, he was one of the few business leaders to fulsomely praise Hockey’s budget last week.

Only a week ago, an inquiry �appeared to be a done deal. Abbott told broadcaster Alan Jones — himself recruited to the cause by the Forrest charm offensive — that he favoured an inquiry.

But the PM was spooked by �either the lobbying power of the mining giants or his own MPs’ doubts on the need for an inquiry — or perhaps both.

The defeat raises the risk in the future that Forrest’s own political influence, cultivated over the years in no small part through his extensive philanthropic efforts, may not be as strong as it was �before the saga. After all, it has left Abbott needing to explain yet �another backflip.

Forrest’s hatred of the big miners stems from his bitter campaign in the mid-2000s to try to force them to share their Pilbara infrastructure with Fortescue, which aimed to smash the four-decade duopoly enjoyed by BHP and Rio.

The giants scoffed at Forrest’s chances of being able to set up a rival. But Forrest responded by snapping up tenements that the two established miners had rejected and then raised the money to build his own infrastructure.

For now, Forrest will continue his fight against BHP and Rio as a matter of survival. But the direction the campaign will now take is anyone’s guess. Some believe he will now focus more strongly on attempts to depict BHP and Rio as tax dodgers through their use of offshore marketing hubs. “I will continue to bring the issue to the attention of the Australian �people,” he said yesterday.

A central element of the campaign is a new “group” called It’s Our Iron Ore, which claims to comprise “concerned individuals, businesses and not-for-profit �organisations” who all want to see higher iron ore prices.

“We are the face of the Australian community, representing families, retirees, members of superannuation funds, workers, businesspeople, companies, and community organisations,” the group’s new website says.

“We are all impacted by the disappearing iron ore dollars in our economy and we want to �ensure Australia gets the most benefit from the mining and resources industry in the future.”

The website features photographs of the faces of apparently “ordinary” people who support the iron ore industry. Strangely, those same faces also feature on the website of a drug and alcohol rehabilitation centre in Florida.

In another blunder, the group’s first tweet this week contained the plainly false assertion that the Australian economy loses $8 billion ($10bn) for every $US1 fall in the price of iron ore.

Forrest might also want to �ensure his rhetoric becomes more consistent. He insists he is not seeking any government intervention in the iron ore market and that he is all in favour of free markets. Yet he has previously said West Australian Premier Colin Barnett should consider revoking the licences of BHP and Rio for selling iron ore too cheaply.

And he infamously suggested in Shanghai last month that the major iron ore producers should agree to cap their iron ore �production to drive up prices — comments that sparked claims of cartel behaviour.

Forrest also began his campaign by accusing BHP and Rio of flooding the market with iron ore. He now prefers to claim that the big miners have merely “threatened” to oversupply the market, which is influencing the futures market and driving down the price even though demand is solid.

His argument that he is standing up for ordinary Australians against the “multinationals” also invites a charge of hypocrisy. First, like BHP and Rio, Fortescue’s own share register is dominated by foreign shareholders. The debt that hangs over Fortescue is all held by offshore institutions.

Forrest yesterday denied he was acting out of self-interest, promising that his chief motive is ensuring Australia’s prosperity and creating jobs. But his own personal wealth has taken a beating because of the price fall, and — deliberate or not — the debate has helped take attention away from a debt-laden Fortescue balance sheet that looks more vulnerable with each drop in the price.

Several executives who spoke to The Weekend Australian chose to stay out of the debate. While they respect Forrest’s achievements in building Fortescue, they say the reasoning behind his argument does not stack up.

Getting the government involved in the market — even if it is only to “shine a light” — does not gel with the free-market principles common among the entrepreneurs of the resources sector.

Iron ore veteran Ian Burston, who once ran Rio Tinto’s Pilbara iron ore business and who is a �former director of Fortescue, told The Weekend Australian that any argument that there should be �intervention in the iron ore sector “does not sit very comfortably in my mind”.

“The market is cruel at times but generally speaking sorts itself out fairly well in the longer-term,” Mr Burston said. “It’s not something than can be fixed in a week, it can take some time, but market forces will ultimately determine what’s going to happen.”

Another former iron ore executive who has long been a supporter of Forrest said the billionaire had reached too far with his iron ore argument.

“This inquiry and everything else is a complete circus,” the executive said. “Nobody’s breaking any laws, and all of the iron ore producers are suffering from the same problem (of falling prices).”

The moves by BHP and Rio to squeeze extra tonnes out of the production capacity they have spent billions building over recent years is completely rational, even if it results in pain for more expensive producers.

“Once you’ve made the investment and go through with it, you might as well get every bit of �production out of it,” the executive said.

For their part, BHP and Rio Tinto should not escape from the debate without some criticism. Some of their rhetoric about the outlook for iron ore could best be described as clumsy and insensitive, and has given Forrest ammunition for his cause.

But fundamentally, Forrest has struggled to convince independent observers that the iron ore price is behaving in an atypical way. As everyone in the resources sector knows, commodity prices move in cycles.

CLSA’s global commodity strategist Ian Roper spent years working inside Rio Tinto as an economist. He has seen inside the majors first-hand, and has no doubt that there has been no �manipulation of the price.

“The big guys, especially BHP and Rio, are extremely paranoid about antitrust lawyers,” he told The Weekend Australian.

“They will never do anything but produce at a maximum level, unless they are actually losing money on a dollar-per-tonne basis. That’s been made clear again and again and again.”

It was the majors’ slow response to China’s economic growth that allowed the iron ore price to reach the incredible highs it did, and provided the window for Forrest to build Fortescue.

Now that the majors have �finally been able to respond to China’s growth with increased production, the price is coming back towards its historical levels.

“This price is still a fantastic price based on history, if you look back to the 80s and 90s, and if you look at the margins (of BHP and Rio’s iron ore businesses) relative to other commodities they produce there’s absolutely nothing wrong with where the price is today,” Roper said.