OPINION: Fortescue’s impressive December quarter numbers show it can juggle its huge list of priorities. But for now, China remains the growth engine.
The new head of Fortescue’s sales and marketing team, Vivienne Tieu, said Fortescue had “engaged constructively” with the CMRG in initial discussions. But Tieu equally made it clear Fortescue had no intentions of stepping back from the extensive network of customers and contacts it has built up in China over decades; like all the big Australian miners, Fortescue will be hoping the strength of these individual relationships will help it negate any pressure from China’s new cartel.
But the tonnes will come eventually – BHP’s modelling expects some by the middle of the decade – and so heightened speculation about Simandou’s potential provides a moment to step back and consider the future path of future development in the Pilbara for Fortescue, BHP and Rio Tinto. But with Simandou tonnes coming and the peak in demand likely past, it’s reasonable to ask how many more big licks of capital Australia’s big miners are likely to allocate to expanding their Pilbara operations in a major way?
The fact that some of those options are in green hydrogen and battery manufacturing and not mining may be disconcerting to some investors and will certainly make for an interesting ride.
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