SG IRON ORE WEEK: BHP refutes oversupply attack
BHP Billiton is running iron ore operations with an “economic rationality” and should not be held accountable for pushing smaller and higher cost producers out of the market, according to a senior executive.
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The world’s biggest iron ore miner by value has deferred several projects in response to plunging iron ore prices, vp for iron ore marketing Alan Chirgwin, told a group of panelists at the 2015 Singapore Iron Ore Week conference on Thursday May 14.
Chirgwin was asked whether BHP’s aggressive expansion had been at the cost of smaller companies. The question was posed in the aftermath of recent comments made by Fortescue Metals Group chairman Andrew Forrest where he claimed BHP and fellow mining major Rio Tinto were intent on flooding the iron ore market with product at the cost of the Australian economy.
Metal Bulletin’s index for 62% Fe iron ore dived to an all-time low of $47.08 on April 2, far below the operating cost level of some smaller miners.
“We’ve been open and transparent about our view on the market. We’re also fortunate to have a good management, quality assets and a healthy balance sheet. We should be taking advantage of that,” Chirgwin said.
The company is always an advocate of a “free and fair” market, he added.
“The market is competitive and cyclical, and we should be efficient in this industry,” Chirgwin said.
BHP believes demand growth for iron ore is still there, he said, but that it would be “modest” and outpaced by supply growth.
“Supply growth will keep pushing on prices,” he said.