Iron Ore Nearing Rio's `Fantasy Land' Shows Depth of Turmoil
- Rio CEO Walsh said in February price of $30 was impossible
- Iron ore, down 45% this year, traded at $39.06 a ton Monday
Iron ore pellets move along a conveyor belt during manufacture at the Lebedinsky GOK's (LGOK) iron ore mining and processing plant, operated by Metalloinvest Holding Co., in Gubkin, Russia, on Tuesday, May 28, 2013. Lebedinsky, Russia's third biggest iron ore mine, is owned 81 percent owned by Russian billionaire Alisher Usmanov, who also owns Mikhailovsky GOK, Russia's second-biggest iron ore mine, and Oskol Electrometallurgical Combine, a steel plant supplied by Lebedinsky.
Photographer: Andrey Rudakov/BloombergWhen Rio Tinto Group’s Sam Walsh, head of the world’s second-biggest iron-ore exporter, was asked 10 months ago whether the steelmaking raw material could reach $30 a metric ton, he derided it as impossible.
“That’s fantasy land -- it simply can’t happen,” Walsh, 65, said in a February interview with Bloomberg Television. “There are very wild forecasts out there that quite frankly just can’t come to pass, otherwise it’s going to be very lonely for us as the lowest-cost producer in the world.”