Rio Tinto CEO Dismisses Criticism Regarding iron Ore Expansion Projects
On Saturday, Rio Tinto's (LSE:RIO) (ASX:RIO) (NYSE:RIO) CEO Sam Walsh defended the company’s recent decision to expand iron-ore supply projects and dismissed criticism as “absolute nonsense” that the company coordinated with global producer to drive out competition.
In an interview with The Wall Street Journal, the 64-year old Walsh denied reports that Rio Tinto’s expansion projects were in place to wipe out competition, saying the plans had been in place “upwards of five years ago.”
“There’s been some comments that we’re doing this to affect others,” Walsh said. “That’s not true. We’re doing this because it makes sound economic sense for Rio Tinto.”
Rio along with companies like BHP Billiton have added millions of tons of new production capacity to their iron ore operations, driving prices for the metal to a new five-year low and in the process making it harder for smaller, higher-cost producers to profit.
Expansion projects have also ripped into government royalties in Australia. Colin Barnett, the state’s premier, warned last month that major producers were risking regulatory attention from the World Trade Organization and European trade officials if the oversupply continued.
“The projects were fully approved by Premier Barnett, as minister for state development. At the time, his government thought that projects were a good initiative,” said Walsh.
According to Walsh, the company’s strength lies in its ability to survive narrow profit margins.
“We are the lowest-cost producer in the world. If you’re the lowest-cost producer, you will be in a particularly privileged position, so we’re continuing to invest on that basis.”
Rio Tinto, which is currently the world’s number two iron ore producer, has been accused in the past of working together with other large producers (BHP Billiton and Vale) to affect market prices. All three companies have denied such activities.
The company is currently in the final stages of its Mine of the Future™ program which aims to streamline mining operations with the use of autonomous technology and machinery.
Unmanned train to allow Vale to reopen iron ore plant
Brazilian miner Vale SA will be able to resume operations at its Timbopeba iron ore dry processing plant in up to two months thanks to the use of an unmanned train, the company said in a statement this week.
Vale - Timbopeba iro ore plant
With the train, Timbopeba will be able to operate at least at 80% of its capacity of 33,000 tonnes of iron ore “fines” per day, reports Reuters.
Vale was forced to shut down the plant in the Alegria mine complex recently after labor authorities in Minas Gerais state banned activities close to the Xingu dam due to concerns of a risk of collapse.
Vale said access by workers and vehicles continues to be suspended in the flood zone of the dam due to the ban even though it remains at emergency level 2, which means there no imminent risk of rupture.
But some workers are allowed entry under strict security precautions and they will get the unmanned train going once it has been tested, which would take between one and two months, the company said.
The unmanned train will travel automatically along 16 kilometers (10 miles) of track operated by a system that can control the speed and activate the brakes, Vale said.
Vale announces first ore at Voisey’s Bay mine extension
Vale has reached the milestone of first ore production at the Reid Brook deposit at the Voisey’s Bay mine expansion project in Northern Labrador, Canada - recognised as the safest mine in Canada.