Fortescue's Andrew Forrest discusses his outlook for the commodities sector in an interview with Bloomberg Television on the sidelines of the Boao Forum in China. The billionaire founder says the mining group will "continue to build up" its copper option. He also says tariffs are "not a great trend" and serve as "a sugar hit."
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Questions asked in this interview
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0:00What was your reading coming out of the China Development Forum and your meeting with Li Qiang about the end demand for steel, where there is an oversupply, and how that leads to a property recovery eventually?
1:11But in copper, would you be cautious right now going into copper, or would you want to go a little bit quicker because of the enthusiasm we're seeing, at least in the US futures market right now?
2:46So what would be your long-term copper strategy?
3:56What have you been seeing as far as trade flows in the ferrous markets, given all the talk about the steel tariffs that we've had out of the White House?
5:21What's your read from the Trump White House on renewables and how it relates to your investments in green hydrogen?
6:40Or are you very sceptical that the US and Russia can help broker a lasting peace?
You had a chance to meet with Premier Li Qiang at the China Development Forum, where we were both there. It's a really strategic time for China to navigate what's happening abroad with the tariffs and also restore confidence in domestic consumption and the property sector and the local economy. What was your reading coming out of the China Development Forum and your meeting with Li Qiang about the end demand for steel, where there is an oversupply, and how that leads to a property recovery eventually?
I think that China's message that it's going to stay the course, that it's very serious about building its economy, about increasing the health, the welfare, the living standards of its people as quickly and as sustainably as it can, is probably a good message for all of us. We've got very deep fragmentation happening in the world. I think that's a very bad thing. I think the world should be a collaborative world. But you've got Europe carving itself off into Europe, you've got Canada wondering about its own existence. Attitudes are changing everywhere. This is not a great trend. Tariffs everywhere, not a great trend. It's a sugar hit. But after the sugar hit, what then?
Yeah, what then? Because we have more tariffs potentially coming on the copper front. I know you're mostly iron ore, but we've talked in the past about moving into some copper assets, also lithium and rare earths, to diversify away. The Chinese slump continues in iron ore, in the property sector, obviously, because new home starts in January and February are the lowest in two decades. So it's still a slump here. But in copper, would you be cautious right now going into copper, or would you want to go a little bit quicker because of the enthusiasm we're seeing, at least in the US futures market right now?
Yeah, look, I'm not going to be taking bets because of tariffs when any economist worth half their salt is going to tell you tariffs are what drove the Great Recession in the 1930s. I mean, it seems a really good idea politically for a very short time. And then you realise your economy gets dragged down as your own consumption falls away, demand for other nations' products falls away, and as a result the global economy starts to stagnate. This is just what happened in the 1930s. Look, I'm not going to follow through on that and make a great decision — we've got small oceans of copper, let's suddenly commercialise them. No. You know, when there's long-term demand trends, when copper is rarer — sorry, I can assure you there's nothing rare about rare earths — you know that there are processing challenges. I can show you tens of kilometres of strike lengths of our rare earths that will be commercialised, and that depends on downstream processing.
So what would be your long-term copper strategy? I know Mr. Henry was at this China Development Forum. He talked about, you know, BHP is going further into copper, not necessarily away from iron ore, but just adding that.
Yeah, no, I really like what BHP is doing. I think they need to. So we will continue to build up that very large copper option which Fortescue has within its own asset base. We see a world where it's going to wake up later in this decade that climate change is accelerating at an accelerating rate. It's here to stay. All the hot air coming out of government, climate isn't listening. Climate doesn't care what you say. It doesn't read the papers. And we will be impacted more and more by climate change. And so I'm saying, look, very short-term policies, trying to wish it away — it doesn't wish anything away. And when the world wakes up, you'll see a very serious move back into the green. And that's why I mean, if you're here for humanity, if you're here for organic life, you're going to be listening to the climate.
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