Rio Tinto CEO Sam Walsh says commodity markets must remain open as debate continues to rage over his company’s iron ore strategy.
Speaking in Seoul, Walsh said when the commodity cycle became tough, there was a temptation to turn inward. “But we must keep our minds and our markets open,” Walsh said.
“There is a temptation to be parochial, to believe that artificial and temporary barriers will alleviate the pain of awkward transition — when to the contrary, being parochial may delay necessary change or amplify the response required.
“We can see such requests and pleas for new barriers, from some in government and some in business.”
While Walsh did not tie his comments directly to iron ore or the company’s Pilbara mines, they came at the same time FMG’s chairman Andrew Forrest had another go at Rio for its plans to ramp up production.
With iron ore prices down to around $US57 a tonne, major miners BHP and Vale announced revised plans to limit some production.
For BHP this means deferring growth in the Pilbara, while Brazilian miner Vale said it would pull 30 million tonnes of high-cost product out of the market.
However Rio is refusing to join the party and has drawn further criticism from Forrest.
“I am pleased, certainly, that Vale, too, have adopted specifically what Fortescue stands for and BHP also signalled that it would expand according to the market, not over the top of it,” Forrest told The Weekend Australian.
“Adopting a policy of expanding at any price or oversupplying the market in the medium term, which now only Rio is doing, is callous immaturity and debilitating to the Australian economy.”
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