Coal looks rough for Rio's new boss
Rio Tinto’s new coal boss has given a fairly gloomy outlook on the future of his new portfolio.
Jean-Sébastien Jacques became the head of Rio’s coal operations after the company split its assets as part of a major cost-cutting restructure.
Jacques says he must work in “a very challenging environment” to ensure Rio coal mines keep making money.
The thermal coal market has hit six-year lows, with the coal value at just $US63 a tonne, a long way from the $US150 a tonne the commodity fetched in 2011.
Jacques predicts it will be years before prices are out of their current lull.
"In coal we have to be ready that we have multiple years, it could be even three or four years, before we see an inflection point," Jacques told Fairfax media reporters.
"There will be volatility, don't get me wrong; but where you say; 'Well there is a real step change' – that won't be in the short term.
“[But] there is no doubt that the world needs more energy, and big chunk of it will come from thermal coal.
“The big question is, where does Australia fit in this?”
Jacques did not recoil at the idea of selling Rio’s coal assets.
“Is coal part of Rio Tinto today? The answer is yes, but any asset is for sale at any point in time. If somebody knocks on the door and makes a very good offer, we would have to look at it.”