Mining giant Rio Tinto has warned that cheap coal from Mongolia as well as congestion at the Port of Newcastle in NSW could undermine export markets for the Australian commodity.
Mr Tom Albanese CEO of Rio Tinto said that he knew the leader of an energy company who likened opportunities in Mongolia to a religious experience.
He said that ‘‘Coal from Mongolia to China is happening. It is expanding, probably doubling every two years.”
Mr Albanese while answering to a query that “will it get to the seaborne markets at a lower delivered cost than Australian coal” said that “I suspect it will too.”
Mr Albanese said that problems at the world’s biggest coal port, Newcastle, were unhelpful.
He said Rio Tinto’s Australian coal production was not at capacity purely because of logistical reasons in getting the coal exported. He said that ‘‘We should remind ourselves that Australia is not the only source of supply for the Asian seaborne market, so if the coal chain does not pick up others will find their way to that market.”
Mr Albanese said that Rio Tinto was leading the way in moving towards a longer term takes or pay arrangement at the Newcastle port facility.
