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Premier eFinance: Australian mining magnate Andrew Forrest sees iron ore supply outstripping demand.
Forrest said he believes iron ore supply will overtake demand and possibly lowering prices in the short and medium term.
By: Premier eFinance
The idea of healthily growing supply was contested by Akio Mimura, chairman of Japan's largest steelmaker Nippon Steel, who told Premier eFinance that iron ore supply and the threat of consolidation of miners were his biggest worries. Mining taxes were also a major concern.
Forrest pointed out that China could take comfort in the hundreds of billions of dollars of resource expansions in the pipeline for Australia, given the importance of security of supply to China and India and other rapidly growing Asian.
"Supply is likely to outstrip demand," Forrest, who is soon to become Fortescue’s non-executive chairman, told Premier eFinance. "It may mean that commodity prices may fall in the short to medium term, but I think they'll be strong and still lead to the very necessary win-win situation which Australia needs and Asia needs."
Australia's iron ore production capacity of about 350 million tonnes a year may grow to over a billion tonnes a year – around what the world's total present capacity is -- by the end of the decade if BHP, Rio and Fortescue can put their plans into effect on time and on budget.
Mimura, speaking through a translator at the same forum as Forrest, said his industry was under pressure as a result of the high cost of raw materials, and said more needed to be done to meet increased demand for iron ore, which would grow faster than economic growth in developing nations.
"This is not only China and India -- all the other emerging economies are accelerating and there will be a tremendous increase in the demand for energy and resources," he told Premier eFinance.
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