Rio Tinto bets on India to fill China’s iron ore gap

InvestorDaily

Rio Tinto remains confident in the long-term outlook for its biggest commodity, arguing that growth in emerging markets, particularly India, will offset some of the pressure from softening Chinese demand. As the miner leans further into copper and debate continues over China’s iron ore demand, Rio Tinto is banking on two major developments — Rhodes Ridge in Western Australia and Simandou in Guinea — to underpin its iron ore business as the global market evolves. Speaking at the Melbourne Mining Club at Melbourne Town Hall, Rio Tinto iron ore chief Matthew Holcz said despite ongoing demand about China’s maturing steel industry and rising scrap steel usage, the demise of iron ore is “very much being exaggerated”. 

While China is approaching peak steelmaking capacity, Holcz said Rio Tinto expects Chinese iron ore consumption to remain relatively stable through to 2030, with some decline after that. Meanwhile, the firm is betting that growth in emerging markets is expected to offset some of that pressure. “India is growing at around 5 per cent a year,” Holcz said. “We expect their consumption to double from now to 2040, and expect them to be a net importer by 2035.”

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