Rio CEO Says Iron Ore Rivals `Hanging on by Their Fingernails’ – by Jesse Riseborough and Jonathan Ferro (Bloomberg News – December 15, 2015)

http://www.bloomberg.com/

The iron ore collapse has pushed producers to the brink of survival, according to the head of the world’s second-biggest mining company.

“There are a lot of producers that we believed would leave the market that are hanging on by their fingernails,” Sam Walsh, chief executive officer of Rio Tinto Group, said in an interview with Bloomberg Television in London. “They are burning up cash reserves of their shareholders.”

Iron ore’s 45 percent retreat this year has left the industry on the precipice of an unprecedented shake-out as higher-cost suppliers are slowly forced to exit the market. Prices are continuing to fall as the largest companies, including Vale SA, Rio Tinto and BHP Billiton Ltd., expand production and grab market share.

Iron ore fell below $39 a metric ton last week, a record low in daily prices dating back to 2009. That’s down from above $190 in 2011, when Chinese demand was booming.

“I suspect that right now, even at a price of $39 a ton, there are people that are suffering pretty loudly,” Walsh said. “Sooner or later the adjustment will take place.”

The slump has hurt miners’ shares. Rio’s stock has lost 37 percent in London this year. It advanced 2.3 percent to 1,890.5 pence by 10:28 a.m. local time.

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-12-15/rio-ceo-says-iron-ore-rivals-hanging-on-by-their-fingernails-

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