The two men had never met before today, but Forrest described the US-based Brazilian as someone he admired after Cliffs backed the Forrest-led Our Iron Ore initiative last year.
Forrest attended the Global Iron Ore & Steel Forecast Conference this morning as a small crowd of a little over 50 people to watch Goncalves present.
Goncalves said the world was producing too much iron ore, which created problems for everyone.
“It all starts with what now is dirty cheap, unnecessarily cheap, iron ore going from Australia to China, leaving China with not only a level it doesn’t need, but that China even doesn’t want,” he said.
Echoing previous comments, Goncalves said the majors had spent billions of dollars on expansions “just to create unemployment in Australia, pollution in Australia and disarray throughout the world of steel”.
He said $US290 billion had been wiped off the market capitalisations of BHP, Rio and Vale all for Australia to move from a 59% market share in 2014 to 64% last year, and for Brazil to move from 18% to 20%.
“When you have 59% market share, what the hell do you need more market share for? What can you do with more than 59 that you can’t do with 59? And then you go to 64 and destroy $290 billion to do that? And you guys think that’s ok?” Goncalves said.
“I think that you should be really outraged by that. I think that Australians should understand that a finite resource is being decimated and generations to come will regret that this generation did not do a thing to stop this destruction of value in this country.”
Once again, Goncalves said BHP and Rio had flawed strategies that were designed to run their competitors out of business.
“And so far, that strategy has been extremely unsuccessful because the main targets are still alive and some of them are doing probably better than BHP and Rio,” he said, using FMG as an example.
Goncalves has long been an outspoken critic of the majors and said Australia’s decision not to hold an iron ore inquiry last year was a missed opportunity.
“It’s water under the bridge, but it was an opportunity. I hope we don’t miss any more opportunities to understand what’s happening in reality in the mining business and the pricing mechanisms of iron ore,” he said.
“Who is gaining and who is losing, and mainly, what is the long-term consequence of all of our actions on all the mining countries, especially Australia.”
Goncalves said “worst job in the world would be the Treasurer of Australia, because you have no idea if you’re going to have money or not” and no one benefitted from the volatility.
“I think Australia needs to carefully distil comments which someone from overseas, which is a friend of Australia, makes about the management of the iron ore industry and the supply side insensitivity,” Forrest said on the sidelines of the conference.
“The aggressive attempt to limit competition despite the consequences to the Australian economy, which we saw last year, and which I think deserves some investigation.
“I’d say let’s look at why an overseas statesmen, who can scrape away all the corporate propaganda, can say ‘this is how it is Australia, this is what you let happen’, yes it deserves that investigation into a supply side strategy to crush competition which did nothing but crush the Australian economy.”
