Rio Tinto has rejected suggestions the company got its steel demand forecasts for China grossly wrong and was a major contributor to the weak iron ore price.
Chairman Jan du Plessis told shareholders at the company's annual general meeting that he stuck by Rio's forecasts of Chinese steel production rising more than 20 per cent to one billion tonnes a year.
Meanwhile, job losses at Pilbara iron ore projects are mounting up and Treasury is predicting the price falls will rip a $44 billion hole in the federal budget over the next four years.
As Fortescue Metals starts cutting hundreds of jobs, chairman Andrew Forrest continued his war of words with the majors on Thursday, telling Fairfax Media it was nonsensical and Australians were paying the price for the multinationals' strategy.
Australian Workers Union assistant national secretary Daniel Walton, representing iron ore mine workers which are losing their jobs in large numbers as the price falls, spoke at Rio's AGM.
"Given so many commentators including internal Rio Tinto sources consider this to be propaganda, does Rio Tinto stand by the figure of one billion tonnes a year?" he asked of Mr du Plessis.
The World Steel Association and prominent economist Ross Garnaut have argued Chinese steel production has already peaked and will start falling.
The figure, which some reports have attributed to major consultants McKinsey and was relied on heavily by Rio and rival BHP Billiton, came after a long debate and was a genuine conclusion, Mr du Plessis said.
"We continue to believe long run peak steel demand of China has a long way to go," he told the AGM.
"The one billion tonnes number indicated is not a pretence and not a facade."
Mr du Plessis said he had had to personally say goodbye to professional and committed colleagues the company made redundant, because of the difficult cyclical cost cutting the mining industry had to go through.
Rio chief executive Sam Walsh insisted that its 20 per cent share of the iron ore market was the same as it was a decade ago.
"This invalidates suggestions that we are responsible for a perceived market dislocation," he told shareholders.
Unlike fellow majors BHP and Brazil's Vale, Rio has not indicated any willingness to scale back its plans to increase shipments this year to 350 million tonnes.
The iron ore price has rallied in the last month since falling to $US47 a tonne and climbed four per cent to above $US60 a tonne on Wednesday for the first time since early March.
That is well below the $US130 levels of just over a year ago, but the mining industry is increasingly arguing that there is scope for a stronger recovery and that perceptions of a supply glut rather than reality have driven this year's falls.
Another 170 million rural Chinese would move to an urban environment, auguring well for the steelmaking commodity, Rio said.
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