BHP Billiton output shows clout of mega miners
A shift away from once-a-year pricing of ore in favour of shorter term contracts also means lower returns on sales. That's because the more ore is sold at spot, the less smaller suppliers can compete with the mega-producers -- namely Vale, Rio Tinto and BHP who enjoy vast economies of scale and together control more than 70 per cent of the global seaborne market.
Counting on demand
The producers are obviously counting on demand remaining up, said Fat Prophets mining analyst David Lennox. But the risk is if the pace of the slowdown in China GDP accelerates, creating less need.
Rio Tinto on Tuesday said it was sticking with its 2012 production target of 250 million tonnes after reporting September quarter output rose 5.6 per cent from a year ago.
Fortescue, which also runs mines in the Pilbara area of Australia's northwest, plans to decide by December whether to restart work on its Kings mine, which could nearly double its output in two years.
But the outlook is uncertain as China's annual economic growth probably slowed for a seventh straight quarter in the July-September period to the weakest since the depths of the global financial crisis, a Reuters poll showed. China releases its GDP figure on Thursday.
Copper output up
Outside of iron ore, BHP said its strategy of wide diversification in commodities was paying off.
The world's No.2 copper producer said production
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