dont u love PR-big 3's insatiable greed has been unbelievable to watch and i've posted articles pointing out that the big 3 earn less from lower prices despite their personal higher volume than they would if each wasnt trying to grab the entire market
also other articles say big 3 are cutting capex to maintain profit in lower price environment they helped create
re the insatiable greed the biggies each planned on taking the entire increase in iron volume from 2007-2012 all by themselves at the expense of others-thus vales planned fleet of 36 400,000 ton monster ships w a 72-75' draft no port could handle
Rio Tinto defends iron ore moves
Dow Jones newswires
1 hour ago
Rio Tinto Chief Executive Sam Walsh has defended the Anglo-Australian mining giant's iron-ore supply expansion and dismissed criticism that the strategy was coordinated among global producers to drive out competition as "absolute nonsense."
Mr Walsh said in an interview with The Wall Street Journal that Rio Tinto made its expansion plans "upwards of five years ago" and said suggestions that the company wants to push iron ore prices down, along with other major producers, had "no truth."
Rio Tinto and the world's other big mining companies are adding hundreds of millions of tons of new production capacity to their operations, sending prices of the steelmaking mineral to their lowest in five years and taking a toll on smaller, higher-cost ore producers.
The move has also eaten into government royalties at Rio Tinto's base in Western Australia. The state's premier, Colin Barnett, last month warned in remarks to the state parliament that major producers were risking regulatory attention from the World Trade Organization and European trade officials if the oversupply went on.
"The projects were fully approved by Premier Barnett, as minister for state development. At the time, his government thought that projects were a good initiative," Mr Walsh, who is in Beijing attending a regional business conference, said.
Rio, the world's No. 2 iron ore miner, is one among a trio of global producers, including BHP Billiton and Brazil's Vale, often accused -- including by Chinese government agencies -- of working together to affect market prices. All three companies have denied such activities.
Analysts have suggested that the trio's simultaneous supply expansion is part of efforts to crowd out smaller competitors, including Chinese companies that have invested in iron ore plants abroad. A Shenzhen-listed unit of Anshan Iron and Steel Group, which owns a majority in the Karara iron ore project in WA, said earlier this year that the price drop led to a decision to reduce Karara's production and contributed to a $640 million writedown on the project.
"There's been some comments that we're doing this to affect others," Mr Walsh said. "That's not true. We're doing this because it makes sound economic sense for Rio Tinto."
Mr Walsh said Rio's strength lay in its ability to survive narrowing margins. "We are the lowest-cost producer in the world. If you're the lowest-cost producer, you will be in a particularly privileged position, so we're continuing to invest on that basis," he said.
Among the critics of Rio's supply expansion is commodity conglomerate Glencore, which in July proposed a merger with Rio that would have produced the world's largest miner. Rio rejected the proposal, and Mr Walsh on Saturday reaffirmed the position, describing commodity trading companies -- Glencore's core capability -- as having "a very different view of the world" from miners like Rio.
Mr Walsh said, despite an economic slowdown, Chinese demand still underpins a robust outlook for iron ore. A transition by China to an economy more driven by consumption means more demand for Rio-produced commodities to make cars and refrigerators, he said. China's efforts to combat pollution will also mean higher demand for the sort of cleaner-burning ore Rio can produce, he said.
Rio is partnering with Aluminum Corp of China, or Chinalco, to develop the Simandou iron-ore project in Guinea, a project so vast that it has been touted as the largest and highest-quality untapped reserve of its kind in the world.
But Simandou has been dogged by disputes over terms of the lease -- exports aren't expected to start until the end of 2018, Mr Walsh said -- and most recently by the Ebola outbreak, which has brought economic activity in parts of West Africa to a near standstill. Mr Walsh said Rio and Chinalco will jointly donate $2.6 million worth of equipment and other goods and materials to Guinea's government to cope with the disease.
RIO
also other articles say big 3 are cutting capex to maintain profit in lower price environment they helped create
re the insatiable greed the biggies each planned on taking the entire increase in iron volume from 2007-2012 all by themselves at the expense of others-thus vales planned fleet of 36 400,000 ton monster ships w a 72-75' draft no port could handle
Rio Tinto defends iron ore moves
Dow Jones newswires
1 hour ago
Rio Tinto Chief Executive Sam Walsh has defended the Anglo-Australian mining giant's iron-ore supply expansion and dismissed criticism that the strategy was coordinated among global producers to drive out competition as "absolute nonsense."
Mr Walsh said in an interview with The Wall Street Journal that Rio Tinto made its expansion plans "upwards of five years ago" and said suggestions that the company wants to push iron ore prices down, along with other major producers, had "no truth."
Rio Tinto and the world's other big mining companies are adding hundreds of millions of tons of new production capacity to their operations, sending prices of the steelmaking mineral to their lowest in five years and taking a toll on smaller, higher-cost ore producers.
The move has also eaten into government royalties at Rio Tinto's base in Western Australia. The state's premier, Colin Barnett, last month warned in remarks to the state parliament that major producers were risking regulatory attention from the World Trade Organization and European trade officials if the oversupply went on.
"The projects were fully approved by Premier Barnett, as minister for state development. At the time, his government thought that projects were a good initiative," Mr Walsh, who is in Beijing attending a regional business conference, said.
Rio, the world's No. 2 iron ore miner, is one among a trio of global producers, including BHP Billiton and Brazil's Vale, often accused -- including by Chinese government agencies -- of working together to affect market prices. All three companies have denied such activities.
Analysts have suggested that the trio's simultaneous supply expansion is part of efforts to crowd out smaller competitors, including Chinese companies that have invested in iron ore plants abroad. A Shenzhen-listed unit of Anshan Iron and Steel Group, which owns a majority in the Karara iron ore project in WA, said earlier this year that the price drop led to a decision to reduce Karara's production and contributed to a $640 million writedown on the project.
"There's been some comments that we're doing this to affect others," Mr Walsh said. "That's not true. We're doing this because it makes sound economic sense for Rio Tinto."
Mr Walsh said Rio's strength lay in its ability to survive narrowing margins. "We are the lowest-cost producer in the world. If you're the lowest-cost producer, you will be in a particularly privileged position, so we're continuing to invest on that basis," he said.
Among the critics of Rio's supply expansion is commodity conglomerate Glencore, which in July proposed a merger with Rio that would have produced the world's largest miner. Rio rejected the proposal, and Mr Walsh on Saturday reaffirmed the position, describing commodity trading companies -- Glencore's core capability -- as having "a very different view of the world" from miners like Rio.
Mr Walsh said, despite an economic slowdown, Chinese demand still underpins a robust outlook for iron ore. A transition by China to an economy more driven by consumption means more demand for Rio-produced commodities to make cars and refrigerators, he said. China's efforts to combat pollution will also mean higher demand for the sort of cleaner-burning ore Rio can produce, he said.
Rio is partnering with Aluminum Corp of China, or Chinalco, to develop the Simandou iron-ore project in Guinea, a project so vast that it has been touted as the largest and highest-quality untapped reserve of its kind in the world.
But Simandou has been dogged by disputes over terms of the lease -- exports aren't expected to start until the end of 2018, Mr Walsh said -- and most recently by the Ebola outbreak, which has brought economic activity in parts of West Africa to a near standstill. Mr Walsh said Rio and Chinalco will jointly donate $2.6 million worth of equipment and other goods and materials to Guinea's government to cope with the disease.
RIO
