BHP Billiton output shows clout of mega miners
The world's biggest miner joined rivals Rio Tinto and Fortescue Metals Group in pressing on with plans to dig up more ore despite risks stemming from cooling industrial activity and demand for steel in China.
Miners have in recent months been scaling back expansions and spending, raising concerns a decade-long mining boom in Australia is dead.
BHP has been flagging for several months that demand growth in China for steel making materials would slow over the next few years and now sees China's economy growing at a slower 7-8 per cent this year and around that level over the next 10 years.
In effect, what this means is that the record prices we experienced over the past decade, driven by the 'demand shock', will not be there to support returns over the next 10 years, BHP Chief Executive Marius Kloppers said in notes for a speech in Brisbane.
The global iron ore market is expected to grow by 650 million tonnes this decade, he said, below the 800 million tonne rise recorded in the previous decade.
Iron ore prices have rebounded to around $114 per tonne from $87 in September thanks mainly to Chinese steel mills restocking depleted inventories. That's still well under the near-$200 a tonne ore fetched in early 2011.
(The) commodity price boom is over and no one can
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