Fortescue can survive iron ore slump

Fortescue Metals Group will stay profitable if iron ore prices slump by $100 a tonne, CEO Nev Power says.

Power’s comments come after analyst consensus saying the iron ore price will tumble when planned new supplies around the world come online in 2014/15, according to The West.

The price of the metal currently sits at around US$176 per tonne, an historic high.

FMG could even endure prices as low as US$70 per tonne, Power said.

We are making sure our business is capable of surviving in those sorts of environments," he said.

"There are lots of people who won’t survive a $US70 a tonne ore price."

Power explained that a strong demand for the metal is set to continue, but prices are reliant on China and will fall when its economy slows.

He went on to say that iron ore grades are falling at Brazilian iron ore mines, so Australia remains well placed to take advantage of China’s economy.

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