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Bloomberg

Iron ore's golden spending era is history. That is the verdict of BHP Billiton, the world's biggest mining company.
BHP and rivals Rio Tinto and Vale are flooding the global iron ore market after a US$120 billion spending spree to boost the capacity of their mines.
Prices have slumped to the lowest in more than five years as surging supply coincides with a slowdown in China, the world's biggest consumer.
"Our company has been very clear that the time for massive expansions of iron ore are over," BHP chief executive Andrew Mackenzie said yesterday.
While BHP is still increasing production, the company last approved spending on an iron ore expansion project in 2011. It was shifting investment into copper and petroleum, Mackenzie said.
Global seaborne output would exceed demand by 100 million tonnes this year from 16 million tonnes last year, HSBC said last month.
Prices, which are trading at about US$70 a tonne in China, may drop to below US$60 a tonne next year, according to Citigroup forecasts.
"At these prices, we still have a very decent business," Mackenzie said. "We've been fairly clear that prices at about these levels were what we were expecting for the longer term."
Investments in copper may help BHP seize on rising demand for energy in emerging economies. Demand from China, the biggest metals consumer, will be supported by electricity grid expansion and greater adoption of renewable energy sources, all of which require more copper wiring, according to Citigroup.
The prospects for an expansion of BHP's Olympic Dam copper, gold and uranium mine in Australia were looking more promising after testing of new processing technology showed early signs of success, Mackenzie said.
Olympic Dam in South Australia is the world's largest uranium deposit and fourth-biggest copper deposit.
BHP is pilot-testing a heap leaching extraction process used in its copper mines in Chile.
If the tests "are successful, and they are showing considerable promise, we will use this technology and phased expansions of the underground mine to further increase Olympic Dam's output", Mackenzie said.
"We are looking at the medium term for the deposit, it's one of the best deposits in the world, it's absolutely critical to our copper strategy," he said. "What we also need is to have cheaper ways of processing."
The producer was seeking to reduce costs at Olympic Dam to make it the world's cheapest copper mine, he said.
Copper demand might rise to 40 million tonnes a year from 27 million tonnes by 2030, BHP's marketing president Mike Henry said last month. "Supply, on the other hand, is expected to remain structurally challenged," he said.
BHP shareholders will vote in May next year on plans to spin off a collection of smaller assets into a new company, BHP chairman Jac Nasser said.
The demerger would be the biggest in the mining industry, separating aluminium, coal and silver assets to create a company valued at about US$15 billion after it begins trading next year.


Iron ore's boom days are finished, says BHP Billiton chief

Chinese demand for iron ore has slumped, fuelling a price decline.

Business

Commodities

Prices slump to five-year low as surging supply coincides with a slowdown in Chinese demand


Iron ore's golden spending era is history. That is the verdict of BHP Billiton, the world's biggest mining company.


Iron ore's boom days are finished, says BHP Billiton chief

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Prices slump to five-year low as surging supply coincides with a slowdown in Chinese demand

Prices slump to five-year low as surging supply coincides with a slowdown in Chinese demand