Rio CEO Walsh Defends Iron Ore Strategy as Prices Collapse
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Rio Tinto Group’s Sam Walsh said if the second-largest mining company cut iron ore output after prices sank, forfeited supply would be made up by rivals with higher costs, and that wouldn’t be in his shareholders’ interests.
“Guess what happens when you take 100 million tons off?” the chief executive officer said on Thursday, after Rio reported full-year profit that beat estimates, record iron ore production and a $2 billion share buyback. “The price goes up, and all those people that went out of the market come back into the market. And guess what? The price gets back to where it was and, whacko, we would be down 100 million tons.”