Rio Tinto’s head of iron ore Andrew Harding has warned Australia should not squander its reputation as a stable place to do business.
As the iron ore-focused miner began legal action in the US against its Brazilian rival Vale, Mr Harding urged the Australian government not to introduce surprising tax changes which could deter foreign investment.
“It really does startle an organisation,” Mr Harding told a business lunch in Perth. “Australia’s not the only place you can mine iron ore. “There’s an awful lot of high grade iron ore sitting in Africa, and for a whole lot of instability reasons it hasn’t been mined to date.”
His comments come as Rio Tinto filed a lawsuit in the US District Court against Brazilian miner Vale and an Israeli company over the rights to develop the massive Simandou iron ore deposit in Guinea in west Africa.
Rio alleges billionaire Beny Steinmetz and his company BSG Resources bribed officials and conspired with Vale to steal mining rights to the multi-billion tonne Simandou deposit but it has not specified the amount of damages it is seeking. Mr Harding said a period of volatile industrial relations and iron ore supply disruptions in Australia several decades ago had opened the door for Brazil to build the biggest iron ore business in the world.
“The evidence is there for us and believing that we’re in some special privileged position that’s going to last forever and we don’t actually have to nurture is just wrong.”
Mr Harding added that he is not bothered by the sharp fall in iron ore prices to near two year lows.
Despite the price of the steel making ingredient falling 2.7 per cent overnight to around $US105 per tonne, Mr Harding said he is focused on long-term urbanisation trends in China rather than short term volatility.
“When the iron ore price goes down I don’t feel good, but the reality is that I actually don’t care about it because the issue is the long term.”
He said the long term indicator that he watches is China’s urbanisation rate – the percentage of the population living in urban areas – which would be strong for at least another decade.
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