Former Rio exec slams ore market
From business spectator
- STAFF REPORTER
- 2 HOURS AGO
A former executive at Rio Tinto has lambasted the move from long-term iron ore contracts to spot market pricing, saying the shift has been a ‘disaster’, according to The Australian Financial Review.
Mal Randall, who spent over two decades with the mining giant, criticised former BHP Billiton chief executive Marius Kloppers for green lighting the change in 2010.
"Iron ore pricing now is, to a large extent, in the hands of the traders who can wheel and deal," Mr Randall told the AFR.
"Sometimes it bears no relation to the actual iron ore price, it's just deals and deals within deals. If they want to push the price up or down somewhere out of Qingdao they will and they'll do it on one or two ships… It's a bit of a mess."
The comments come as the iron ore price sits at lows not seen since 2009, before the shift away from annual contracts.
Benchmark iron ore ended last week at $US63.40 a tonne, just 3.6 per cent above the five-and-a-half-year low reached earlier in the month.
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