Eric Johnson

Nice to be with you, James.

Yeah, I called it diesel economics, James.

And like all things, there's a lot of moving parts to any story.

Nothing is quite as simple as it seems.

And that's right.

Rio Tinto, like its big rival BHP, Rio quantified the amount of diesel they use in the Pilbara.

So all up annually across its operations around the world, 1.6 billion litres of diesel and two thirds of that comes from, two thirds of that is used in the Pilbara.

That's running generators and those big, mighty haul trucks that you see running around the clock, also trains, freight, everything to get that on or out of the ground and onto the ship.

So interestingly, so straight up, like all of us, we're seeing higher prices at the petrol pump.

And so too Rio Tinto is seeing high prices.

And it's a big user of diesel.

So it's straight up, it's starting to fuel these higher prices.

So looking through this, so what actually happens is, so sure, that adds to the cost of digging one ton of iron ore out of the ground.

All other users are also feeling this cost, but the bigger players are benefiting, James, because they have bigger scale, more scale, so they can spread the cost over more units.

And that's a real powerful tool when it comes to business.

And

So Rio Tinto and BHP.

So while they're saying, yes, bottom line cost of diesel is going up in Rio's case, it would be annualized at about more than $300 million.

That's US dollars.

However, because smaller marginal players are pulling out of the market and pulling back on production,