[miningmx.com] – THE over-supply of iron ore to China which was depressing the price of the mineral sent the wrong message and was a flawed strategy of the major miners, said Colin Barnett, the premier of Western Australia.
In an interview with Bloomberg News, Barnett said moves by BHP Billiton and Rio Tinto to boost output should be replaced by a strategy of catering for growth but that they would not “flood the market”.
“The market signal is wrong, and I believe the major companies have a flawed strategy. I don’t think it’s good business for them or their shareholders,’ said Barnett. Iron ore sank below $50 a metric ton this month as surging low-cost supply from Rio, BHP and Brazil’s Vale SA spurred a glut amid faltering Chinese demand, said Bloomberg News.
“They should reschedule some of their production and give a signal to the market that, yes, we’ll cater to iron ore demand and we’ll cater for growth, but we’re not going to flood the market,’ Barnett said.
“If Rio and BHP come to me in the future, they will have to seek rights to expand their projects. I might say “yes’, I might say “no’.’
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