Aug 8, 2014

Rio throws down the gauntlet on iron ore

Rio Tinto is reporting spectacular profits, and it has no plans to slow down production of iron ore, even though prices are falling.

Paddy Manning

Crikey business editor

Fortescue chairman Andrew Forrest might be feeling a little less rich this morning: Rio Tinto chief Sam Walsh last night threw down the gauntlet to his global competitors in iron ore, vowing to ramp up production even though prices have fallen 20% in the past 12 months. The inevitable result will be downwards pressure on prices.

Only those with the fattest profit margins will survive, and that is Rio’s clear intention, as Fairfax columnist Malcolm Maiden wrote here. On last night’s one-and-a-half hour half-year earnings call, reporting a 21% jump in profits to US$5 billion, Walsh positively crowed about Rio’s position on the global iron ore cost curve, declaring “we are the lowest-cost producer”.

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Leave a comment

3 thoughts on “Rio throws down the gauntlet on iron ore

  1. Jaybuoy

    We need a proper audit of what our mineral wealth is.. why should we allow our finite resources to be discounted away..

  2. Daly

    We need to tax these profits, the minerals are ours and Abbott/Hockey want to reduce debt. Easy money here, taking it from foreigners, instead of pensioners, students and the unemployed!

  3. Yclept

    There would be no budget “crisis” is OUR iron ore was sold to these pirates at the proper price!

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