Lourenco Goncalves, the chief executive of US iron ore miner Cliffs Natural Resources, told the Global Iron Ore and Steel Forecast conference in Perth today, from The Australian:
“Because that was not done and the strategy was to drive prices down, Fortescue is still out there. They will have to keep these prices down forever, because even if everybody else in Australia goes broke, it doesn’t means that the assets won’t be bought by someone later and restarted,” Mr Goncalves said.
“The only way to keep these things going is by keeping prices down forever. I respectfully disagree with the strategy.”
Mr Goncalves said the apparent strategy of the miners to drive out higher-cost producers in China and other nations could be “a difficult point if Australia had to defend that in the WTO”.
The point about having to keep the price down has merit but the rest is absurd. There are six firms across three continents currently aggressively expanding their iron ore production, including one Chinese. The WTO would get involved, however, if those seven firms got together and said “we’ll all cut production”.
Having said that, one more potential just closed:
Glencore PLC’s has said it would book a US$240.7 million ($315.7 million) writedown and shelve development of a West African mine because of plunging prices for the steelmaking ingredient.
Sphere Minerals (SPH), which is 88 per cent-owned by Glencore, said it could not develop the Askaf project in Mauritania profitably at current low iron-ore prices even after intensifying efforts to reduce operating costs.
