New Rio Tinto boss Jean-Sébastien Jacques signals end of iron ore wars – by James Chessell and James Thomson(Australian Financial Review – July 3, 2016)

Rio Tinto’s new chief executive, Jean-Sébastien Jacques, has signalled the era of accelerated iron ore production is over with the world’s second-largest exporter less concerned about chasing market share at a time when Chinese attempts to remove overcapacity from domestic steelmaking could take longer than expected.

Mr Jacques, who formally replaced previous Rio boss Sam Walsh on Saturday, also played down the prospect of the London-based miner using its relative position of strength in the resources sector to embark on an acquisition spree, arguing prices paid for quality mining projects in 2016 were high despite the worst commodities downturn in decades.

The 44-year-old Frenchman takes over the role at an uncertain time for iron ore – a commodity that accounted for 87 per cent of Rio’s underlying earnings in 2015. Prices have gyrated in the past two years as miners controversially increased production while Chinese demand for the key-steelmaking ingredient cooled.

Mr Jacques said the financial turmoil following Britain’s historic decision to leave the European Union did not support the case he should “diversify away from iron ore” through copper acquisitions because prices of key Rio commodities, with the exception of gold, all moved “the same way at the same time, more or less”.

“The fundamentals of the industry are good,” he said. “However, the market conditions are challenging because there is overcapacity, there is oversupply. We expect market conditions to remain challenging with a high level of uncertainty even before Brexit.”

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