Australian miner
Rio Tinto CEO Sam Walsh has talked to Bloomberg TV about the price volatility in the
iron ore market, expressing confidence that
Rio Tinto will be able to survive the decline in
iron ore prices since it is the world's lowest-cost
iron ore producer at $20/mt, compared to the current
iron ore price at $92/mt. "I think we'll be ok", said the
Rio Tinto CEO.
Mr. Walsh does not expect
iron ore prices to go down to $80/mt as Goldman Sachs predicts for the next year, adding that, if this happens, "a lot of my friendly competitors are going to disappear". He recalled that in a year and a half ago when a number of people exited the market and when China, Africa and partially
Australia lost domestic supply, due to
iron ore prices going down to $80/mt. "A level of somewhere north of $100 is more realistic," he said.
Despite too much supply and demand not ramping up as it is used to, the
Rio Tinto CEO indicated that they are confident the expansions they are making "will be justified, they will be required by the world".
Regarding the Simandou
iron ore project in Guinea, the largest
mining project in Africa, the investment framework for which was signed recently, the
Rio Tinto CEO said that the $20 billion project will come online in December 2018.