Iron ore battle heats up
BHP Billiton iron ore boss Jimmy Wilson and Fortescue Metals Group chairman Andrew Forrest have ramped up iron ore's war of words, with Mr Wilson accusing Fortescue of making itself the "world's most prolific iron ore growth story".
In an internal email to BHP staff, Mr Wilson responded to months of criticism from Mr Forrest, who has blamed BHP and Rio Tinto for flooding the market and pushing prices down.
Mr Wilson said BHP had acted responsibly in deferring expansion plans, citing last month's decision to defer a 20 million tonne-a-year extension of its Port Hedland export facilities.
He said BHP had been pulling back its planned export capacity from as early as 2012, when it abandoned plans to build an 110mtpa outer harbour at Port Hedland
"At the same time FMG chose to develop a new berth in the inner harbour to deliver an additional 25mtpa, making FMG the world's most prolific iron ore growth story," Mr Wilson said.
"In fact, the last time the BHP Billiton board approved major capital for iron ore was in March 2011, to deliver capacity in excess of 220mtpa."
In response, Mr Forrest stepped up his criticism of BHP and Rio, telling _WestBusiness _the iron ore market was in balance at current global production levels.
He said prices had been pushed down by the duo's "nauseously repeated statements of oversupplying the market, of driving down the iron ore price, of being the last man standing".
Mr Forrest rejected suggestions his criticism of Fortescue's competitors was hypocritical, given Fortescue's rapid rise to third-biggest Pilbara producer.
"Fortescue filled a gap, and we're proud of that, we're proud of being the only company to have climbed over the massive barriers to entry that BHP and Rio have erected to stop competition in Australia and globally," he said.
Mr Forrest said the company's fifth Port Hedland berth was part of its plans to expand to a 155mtpa run rate from 2010, and Fortescue had pulled back its capital spending plans in 2013.
"We know we have a 200mt port and we've been clear we're not going to use it because we have listened to the iron ore market," he said. "We know that would only push the iron ore price down, which is exactly what BHP and Rio have been doing.
"We are not being irresponsible, exuberant and egotistical in saying we are going to expand at any price, we're going to crush the market and expand in the medium term - that's code for push the price down for years. They're all words from Rio and BHP, they're not from Fortescue."
