UPDATE 3-Rio Tinto unshakeable on iron ore expansion plans

jueves 7 de mayo de 2015 05:38 GYT

* Rio defies critics of its China steel demand forecast

* Rio looks to cut iron ore costs further

* Fortescue, IOC, Kumba under pressure from low prices (Changes dateline, adds analyst comment, detail on rivals)

PERTH/LONDON, May 7 (Reuters) - Rio Tinto is to stick with plans to produce iron ore at full tilt despite a plunge in prices, turning up the heat on rivals large and small, which are struggling to cope with the consequences of a supply glut.

While rivals BHP Billiton and Brazil's Vale have applied the brakes to their medium term output plans, Rio said on Thursday it would focus on cutting costs so it remains the world's most profitable producer, keeping its forecast that China's steel demand will grow towards 1 billion tonnes a year.

"With iron ore now trading around $60 a tonne delivered into China, we have more to do to ensure that we maintain the margin between ourselves and other producers," Chief Executive Sam Walsh said at the global miner's Australian annual meeting.

Rio Tinto, the world's second biggest iron ore producer, and rivals Vale and BHP ramped up output just as demand growth slowed in major customer China, leading to a 55 percent fall in prices since the start of last year that has threatened the survival of smaller producers.

Rio can continue to produce profitably with iron ore prices around $30 per tonne, but a growing number of rivals are suffering. Minnows like Atlas Iron and BCI Iron are most at risk if iron ore prices remain close to current levels for long.

If prices fall further, as analysts expect, even some large producers will become loss-making.   Continuación...