Mr Tom Albanese CEO of Rio Tinto is concerned about a double dip recession and has warned that relations between the world''s iron ore miners and buyers risk becoming unmanageable.
Mr Albanese told a US conference that a likely pull back in Chinese stimulus spending, sovereign risk problems in Europe and potential curbs on US stimulus efforts were all near-term risks to global recovery. He said that "I am somewhat concerned about a W-shaped recession.”
Mr Albanese stepped up the pressure saying tensions over pricing would become "increasingly unmanageable" if the traditional pricing system doesn''t change.
He added that "If it doesn''t evolve, it''s going to break.”
Some observers have suggested Rio Tinto is taking a softer approach, with BHP the most aggressive advocate for spot pricing and shorter-term contracts.
Mr Albanese''s caution coincides with the release of a forecast that export earnings for Australian metals and minerals would jump 17.6% over the next year. An Australian Bureau of Agricultural and Resource Economics report predicts earnings will grow to USD 87.9 billion, driven by bigger export volumes and higher prices for iron ore.