The inside story of Rio Tinto’s iron ore battle with China. The final round of brinkmanship in the iron ore wars took place on the afternoon of June 23 at a Baosteel office in Shanghai.
The final round of brinkmanship in the iron ore wars took place on the afternoon of June 23 at a Baosteel office in Shanghai. Baosteel, China’s industrial champion, and Rio Tinto, the world’s second biggest miner, had already weathered roughly a round a fortnight since February without any sign of progress.
The talks began after lunch with Baosteel’s chief negotiator Ding Shouhu flinging threats and statistics at Rio Tinto’s Will Malaney, as usual, and Malaney returning in kind.
Baosteel was insisting on a price rise close to the 71 per cent agreed with Brazil’s Vale four months earlier. Rio Tinto was after nearly double that, to bring prices in line with China’s sizzling spot market.
It was a strategy of mutually-assured destruction. If they failed to find common ground that day then that was it. The 10 and 20-year contracts that govern most of Australia’s 300 million tonnes of annual iron exports would expire on June 30, plunging the Australian mining industry and Chinese steel makers into an unpredictable world of spot market sales and retaliation from Chinese industry and government.