• by: Matt Chambers and AAP
• From: The Australian
• May 30, 2014 4:22PM
BILLIONAIRE miner Andrew Forrest says he expects the price of Australia’s major export, iron ore, to remain strong.
“I’m pretty comfortable with the iron ore price oscillating around the $US110 (per tonne) mark,” Mr Forrest told The Australian’s Australia in China’s Century conference in Melbourne today.
“It could wander down to $US80, it could wander up to $US140.”
Prices have recently fallen to $US95.70 a tonne as Australian supply ramps up and China reins in steel overcapacity.
Mr Forrest made his fortune as the driving force behind iron miner Fortescue Metals Group, which he now chairs, said China was still trying to urbanise an Australia each year.
“The Chinese ability to manage poverty out of its country is unprecedented and their consumption of steel is still running at record rates,” he said.
Mr Forrest also angrily slapped down the suggestion that China was vulnerable to the biggest property and credit bubble collapse in history.
Mr Forrest said China’s rise in the last three decades was the world’s greatest modern economic miracle that had dragged its people out of poverty.
He was asked at conference by Lindsay David, a co-founder of a green technology company, if Australia’s economy was also at risk of collapsing because it made a very large bet on China’s continued growth.
“This country came out of political purgatory with no money and just the shirt off their backs and set their people free,” he said.
“They are hard working, intelligent and determined to raise their children’s living standards more than most countries ... 400 million people still have to be urbanised.
“Walmart and other huge consumers rely on China, add to the mix trillions of dollars of foreign reserves, soft power and I would say your bet against China is the only guarantee of loss I’ve seen for a long time.”
He said Australia should make exporting food to China a far greater priority and that Chinese premier
It seems pretty obvious if you've gone to China that the place has a long, long way to go and pretty much up is the direction. In fact it is pretty obvious Asia is on the same trajectory. Would love to see a plot of global market caps by country over time as countries evolve from emerging to developed. Difficult to fight the tide.