Rio Tinto’s iron ore chief Andrew Harding says the miner has already seen a rise in production from marginal mines in China as a result of the improved iron ore price of recent months.
Speaking to The Australian after a speech at an Austmine function in Perth yesterday, Mr Harding said higher-cost iron ore mines of China had been quick to seize on the recovery in market conditions. “What you will always see as a price moves up is supply moves in. We’ve seen that in recent times, the output from Chinese mines went up,” Mr Harding said.
His comments came as rival BHP Billiton issued a pessimistic diagnosis on iron ore prices. Despite recent upgrades from analysts, BHP’s chief mining analyst declared the price rally in the nation’s biggest export was temporary and that fundamentals looked unconvincing.
Speaking at Singapore Iron Ore week, BHP’s marketing vice-president Vicky Binns said the short-term outlook was not good for prices.
Slides from her presentation said it was a “temporary rally” and that the market had “unconvincing fundamentals”. Ms Binns pointed to low cost supply still to come and lower costs being driven across the industry.
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