‘Stop complaining about a supply glut and take charge’ — BHP, Rio to small iron ore miners
The world's two largest mining companies BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO) once again defended Tuesday their strategy of increasing iron-ore output at a time of falling prices and global oversupply.
The man in charge of BHP’s massive iron ore business, Jimmy Wilson, said in a statement the company’s ‘robust’ results confirm BHP’s strategy is just right.
"The effectiveness of our approach is validated by our robust financial and operating results despite the challenging market conditions (…) For the first half of this financial year, the team has delivered a solid underlying earnings before interest and tax margin of 49%, and a return on assets of 34%," he said.
And while the mining giant warned the iron ore market is likely to remain volatile, it noted that demand from China remains compelling.
His remarks echoed earlier comments from Rio Tinto’s iron-ore boss, Andrew Harding, who said he was confident on Beijing’s ability to push the Chinese economy into a new stage of growth.
Speaking at the Global Iron Ore and Steel Forecast conference in Perth, Harding called struggling iron ore miners to stop blaming a global glut for their situation and take responsibility for their current predicament.
“I take no enjoyment out of the pain and suffering that higher cost procures may be suffering in this marketplace, but there’s a globally competitive market place and it is open to all the actions that take place by all the people in the market,” Harding was quoted as saying by The Australian.
“As the price comes down, if you’ve made an investment with your own funds or with shareholder funds in a project that is not sustainable as the market price dips, that’s your responsibility (…) That is not anybody else’s responsibility,” he added.