The supply-demand imbalance has seen iron ore price sink
Sydney - AFP
Rio Tinto's iron ore chief on Thursday hit back at critics of the mining giant's decision to continue expanding its iron ore output even as prices plunge, saying Australia did not have the power to control the market.
Leading exporters such as Rio and Anglo-Australian giant BHP Billiton have kept lifting production levels, adding to a supply glut worsened by slowing growth in China, the world's largest commodities consumer.
The supply-demand imbalance has seen the ore price sink by more than two-thirds since peaking near US$200 a tonne in 2011, and placed the bottom lines of higher-cost smaller miners under pressure.
"There has been a view that Australia can simply turn the iron ore tap on and off to regulate the global, market-based price," Andrew Harding, head of Rio's iron ore division, said in a speech in the West Australian city of Perth.
"We are vigorously competing against global suppliers for market share. If we stop doing that the Pilbara (mining region) producers will lose and Australia will lose. It's that simple.
"If my leadership journey has taught me one thing, it's that your competitors will happily relieve you of your market share if given even half a chance."
Critics, including fellow Australian iron ore producer Fortescue Metals, have claimed the large miners' push to lift production is deliberately done to flood the market and drive competitors out of business.
BHP, world's biggest miner, said last month its ore production jumped by seven percent in the July-September quarter, while Rio's output rose by 12 percent for the same period.
Harding said Rio expected world demand for iron ore to be around three billion tonnes by 2030, a two percent increase from current annual levels.
Chinese demand was forecast to remain strong amid one percent annual growth in steel production, while demand from other emerging markets was also set to grow, Harding added.