10/03/2015 - 12:45

Rio Tinto denies flooding the market

10/03/2015 - 12:45

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Australia’s biggest and lowest cost iron ore producer has hit back at claims it has flooded the market with supply, with Rio Tinto pointing the finger at its big Australian competitors.

Rio Tinto chief executive iron ore Andrew Harding.

Australia’s biggest and lowest cost iron ore producer has hit back at claims it has flooded the market with supply, with Rio Tinto pointing the finger at its big Australian competitors.

Speaking at the Global Iron Ore & Steel Forecast conference being held in Perth Rio Tinto iron ore chief executive Andrew Harding said Rio’s share of the global seaborne iron ore trade had consistently remained around 20 per cent during the past decade.

During the conference, which was not attended by representatives from Fortescue Metals Group, who are in the US refinancing debt, Mr Harding presented data which showed FMG had contributed most to an increase in iron ore production, followed by BHP Billiton and then Rio Tinto.

The increased production has been part of a long-term strategy by the three largest producers to vastly increase capacity and use that scale to drive down cost.

From January 2011 to December 2014, Mr Harding said 248 million tonnes of additional iron ore were produced by Rio Tinto, BHP Billiton and FMG.

Rio Tinto accounted for an additional 63mt million, or 25 per cent.

BHP’s additional production accounted for 32 per cent and FMG’s accounted for 43 per cent.

“Some would like you to believe that Rio Tinto has had the largest volume increase in that time, but as you can see this is simply not the case,” Mr Harding said.

“It’s been said Rio Tinto is the largest contributor to the increase in volumes and the simple data does not support that.”

Mr Harding also responded to claims from smaller, higher-cost miners that Rio’s expansion policy had contributed to a more challenging environment.

“I take no enjoyment out of the pain and suffering that higher-cost producers may be suffering in this marketplace,” he said.

“But it is a globally competitive marketplace and it is open to all the actions that take place by all the people in the market and the reality is as the price comes down, if you made an investment with your own funds or shareholders funds in a project that is not sustainable as the marketplace dips that’s your responsibility, that is not anybody else’s responsibility.

“One of the harsh realities of course, and that I do get concerned about is the impact that that has on employees.

“But it’s the responsibility of the person who made the investment not other people’s responsibility.’’

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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