Fitch Solutions has predicted that Australian iron ore production will experience minimal growth from 2020 to 2029, despite new mines such as the South Flank, Koodaideri and Eliwana projects coming online.
Fitch Solutions estimated an average growth of 0.7 per cent per year, compared with 8.7 per cent growth over the previous 10-year period.
The slow growth was blamed on mothballed mines by junior miners, while major players stick to their output growth targets.
BHP’s $2.9 billion South Flank development in the Pilbara, Western Australia is expected to come into production in 2021, the same year that Rio Tinto plans to mine its first tonnes from the Koodaideri project in the Pilbara.
Fortescue Metals Group’s $1.3 billion Eliwana project in the Pilbara is also scheduled to come online next year.
“Majors continue to decrease costs and increase production in the longer term,” Fitch Solutions stated.
“We expect majors Rio Tinto, BHP and Fortescue Metals Group to drive Australian iron ore production.”
“Remaining cost-competitive will be a focus for iron ore miners in a long-term weak price environment, with top firms investing in technology to maintain an edge.”
Rio Tinto also took top spot in terms of efficiency as iron ore output is put against earnings per metric tonne, beating iron ore majors including BHP, Vale and Fortescue, according to Fitch Solutions and Bloomberg.
Brazil’s iron ore output growth was also forecast to rebound in the coming years, increasing from 465 million tonnes this year to 573 million tonnes by 2029.
This averages 2.6 per cent growth a year, thanks to low operating costs and a solid project pipeline.
China will see a lower iron ore production over the coming years as weak iron ore prices and tightening environmental regulations force higher cost operations offline.
The country’s imports were predicted to reduce over the coming years due to slowing steel production.