Thermal coal prices will take years to recover, according to Jean-Sebástien Jacques, CEO of Rio Tinto’s Coal and Copper Group.
“In coal, we have to be ready that we have multiple years – it could even be three of four years – before we see an inflection point,” Jacques told the Australian Financial Review. “There will be volatility, don’t get me wrong; but where you say, ‘well there is a real step change’ – that won’t be in the short term.”
Jacques took over Rio Tinto’s newly merged Coal and Copper Group for about two months since the company’s restructuring from five to four operating divisions was announced – a move designed to further cut costs and optimise operations at the diversified miner.
Jacques also indicated that the company would consider selling its coal assets, which are centred on the Hunter Valley in New South Wales, Australia.
“Any asset is for sale at any point in time,” he said. “If somebody knocks on the door and makes a very good offer, we would have to look at it.”
Rio Tinto is one of Australia’s largest coal producers, mining 25 million t of semi-soft coking and thermal coal, as well as almost 7.5 million t of hard coking coal in 2014. Thermal coal prices are currently at six-year lows of US$63/t – less than half of their peak at US$150/t in 2011.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/11052015/no-price-recovery-in-short-term-says-rio-tinto-coal-boss-2254/