Cliffs Natural Resources ‘can’t wait’ to exit ‘horrible’ Australian iron ore business – by Peter Ker (Sydney Morning Herald – April 30, 2015)

http://www.smh.com.au/

US miner Cliffs Natural Resources says the seaborne supply of iron ore to China is a “doomed, horrible business”, and declared it can’t wait to finish mining in Western Australia.

Speaking after a decision to cut jobs and close one of its three iron ore pits in Western Australia, Cliffs chief executive Lourenco Goncalves said big miners like BHP Billiton and Rio Tinto were trying to scare the iron ore market into pessimism with their expansion plans, but could no longer afford those expansions.

Cliffs’ Koolyanobbing operations in Western Australia made a slim profit of $0.26 per tonne during the March quarter, and the Cleveland-based company responded by reducing the remaining life of the operation from 4.5 years down to 3.5 years.

“The seaborne market is doomed, is cursed, is a place not to be in. I can’t wait to get out of Australia,” said Mr Goncalves. “As soon as I get to the end of life of mine in Australia, I’m out of there … I can’t wait to get out of the seaborne trade and let the Australians take that horrible business on their own hands.”

Mr Goncalves has previously criticised the iron ore expansion plans of Rio, BHP and Vale, and on Thursday said those plans were now just empty threats.

“My thesis is they are threatening a capital expansion that they are not planning to deploy … it is a lot more of lip service and empty threats and bad advertisements,” he said.

“The biggest problem for the iron ore price at this point is not even the fact that the world is being flooded with iron ore. It is the fact that the market and the press and investors are being flooded with bad information about the expansion plans of three companies.”

Mr Goncalves pointed to BHP’s decision last week to defer spending on iron ore expansions at Port Hedland, and said Rio and Vale would soon follow suit.

“None of the three majors can continue to support their massive capex needs without allowing the iron ore price to increase,” he said.

For the rest of this article, click here: http://www.smh.com.au/business/mining-and-resources/cliffs-natural-resources-cant-wait-to-exit-horrible-australian-iron-ore-business-20150430-1mwl4r.html

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