13:47 27.10.2019

China doesn't care about pollution, says iron ore miner

Source: Financial Review
China doesn't care about pollution, says iron ore miner

Shrinking price premiums for high-grade iron ore are an admission by China that it does not care about the environment, the boss of US miner Cleveland Cliffs says.

Well known for his aggressive critiques of rival iron ore miners, Cliffs chief executive Lourenco Goncalves accused big corporations, "coward governments" and even America's National Basketball Association (NBA) of being too scared to blow the whistle on Chinese pollution and trade tactics.

His focus on China was sparked by a sharp decline in the premium paid for higher grade iron ore products like pellets, with Mr Goncalves saying that decline was "absurd and only tells us China actually does not care about the environment".

"If premiums for 65 per cent ore do not recover, that's basically an admission from the Chinese that they are happy to continue to pollute the environment with reckless abandon," Mr Goncalves said.

Most analysts believe the shrinking premiums have been driven by a tighter balance between iron ore supply and demand this year on the back of mine curtailments in Brazil. Reduced profitability among Chinese steelmakers has also been named as a factor reducing mills' ability to pay for the more expensive types of iron ore.

Mr Goncalves accused big corporations of putting profit before principle when it came to China.

"It would help if members of the press, influential figures from the business and academic sectors and public officials at all levels and both parties actually talk about pollution made in China," he said.

"So far no one, and that includes Apple, Google, General Motors or even the NBA is actually willing to risk losing exposure to that 1.4-billion-person market. With that China continues to get a free pass to pollute the world and destroy jobs everywhere while they grow their own middle class and destroy ours."

The comments come despite the US withdrawing from the 2015 Paris climate accord in 2017, and were made less than a month before Chinese heavy industry goes into its now familiar winter shutdown season in a bid to improve air quality.

The US Environment Protection Authority reported that 30 per cent of global emissions in 2014 came from China, with the US the second-biggest source in that year with 15 per cent.

But the World Resources Institute believes the US has had a bigger role in cumulative emissions over history, saying it was the world's biggest emitter between 1990 and 2011 (a period for which the WRI said complete data was available) and was also the world's biggest emitter in the period between 1850 and 2011; a period for which less complete data was available.

Mr Goncalves' attack, which included describing China as "an enemy country of the United States", comes less than a month after Fortescue Metals Group passionately defended China against suggestions it was now a "developed" nation for the purpose of trade rules.

"We really hope the extreme levels of pollution in China will one day be treated seriously instead of being willfully ignored by big corporations and their short term profit-driven CEOs," Mr Goncalves said last week.

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