Halted Fostescue projects could recommence in 2013

Andrew Forrest, Fortescue Metals Group chairman, has committed to resuming iron ore projects and has predicted demand for from China would pick up again.

Forrest, speaking to The Australian, said that suspended projects could come back on-line next year, as China’s economy recovered from its slowed growth, related to the country’s leadership transition.

"China will continue to grow and urbanise and this is off a higher base — something people regularly don't factor in,” he said. “I believe the new leaders will enact polices that will see China attain sustainable growth in the high single digits.”

"At a conference in Florida early this year, I laid out the trends in the Chinese economy and that there would be a slowing in growth going into the leadership transition.”

He said that the slowdown was unsurprising.

"The question is why the West should be surprised about that if you think of China as an extremely large company changing chairman, chief executive and senior leadership, many of its direct reports all at once."

Fortescue cut production and staff heavily in response to the drop in iron ore prices, led by slowed demand from China. He said that the cuts made were beneficial in the longer term.

"I believe that when you cut costs you should do it in a big way and quickly," he explained to The Australian.

“Through the changes we made, we have now lowered our cost base by 10-15 per cent as we strive to be in the bottom 25 per cent of operations-cost operators.”

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