RIO pulls trigger on Pilbara killer


If you want to be able to sell Fanta to China in times of war, you will need a source of it other than Australia:

Rio Tinto’s board has approved the world’s biggest mining project in West Africa, chief executive Jakob Stausholm said as he outlined the company’s ambition to produce iron ore from the $20bn development as soon as 2025.

“The board yesterday sanctioned the biggest mining project in the world,” Stausholm told the Financial Times.

Rio’s state-owned Chinese partners, including Chinalco, the world’s largest aluminium producer, and Baowu, the world’s biggest steel producer, still need final investment approval from Beijing, but Stausholm said he was “very confident” this would happen soon.

“Early November I was out there. I flew over the rail line, the mines and the port in a helicopter, it is amazing what has happened,” Stausholm said, adding that tunnels along the rail corridor had already been prepared and materials ordered.

You should have stayed there, mate. Once this ore arrives amid the Chinese ‘completions cliff’, all Australians will suffer for it as the iron ore price craters, and Simandou forces the closure of Aussie mines:

Then again, that pales into insignificance when one considers that RIO will now have a significant source of iron ore to sell to China in the event of any wartime blockade of Aussie ports triggered by an invasion of Taiwan.

A war that RIO just made more likely for that very reason.


You go, girl!

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.