BHP Billiton's chief executive Marius Kloppers says the global iron ore market will slow down as China’s steel consumption has now peaked.
Kloppers predicts that the iron ore market will slow down to 650 million tonnes this decade, down from 800 million tonnes last decade, The West Australian reported.
Kloppers said that as China moved towards a consumption-led economy, there were still opportunities for companies who could supply competitive and low-cost steel.
BHP said commodities such as copper, energy and aluminium will continue to be in high demand in China.
"As these cities and buildings are completed and as people continue moving to the cities, their future needs will include the next level of consumer goods being kitchen appliances, heating and air-conditioning, cars, and so on," he said.
"While all this occurs, steel intensity per unit of GDP will continue to moderate, and growth rates for iron ore and coal are likely to decrease."
In an address to the Brisbane mining club, Kloppers said companies were now starting to look at where cost cutting measures and productivity improvements could be utilised.
''The next round of minerals investments in Australia will, almost without exception, be captured only if costs are decreased and productivity is improved. Companies and governments need to work in partnership towards attracting the next rounds of investments,'' he said.
The mining giant has recently canned plans to build the massive Red Hill and Saraji East coal developments in Queensland, citing a "challenging external environment" for the cutback, as the iron ore market started to shift.
At the time, BHP explained that this "decision follows a continuing operational review of the Gregory Crinum operations, which determined that the Gregory open-cut mine production was no longer profitable in the current economic environment of falling prices, high costs and a strong Australian dollar".
Kloppers confirmed that BHP had 20 projects underway with a combined budget of $23 billion, including a large oil and gas business.
Image: Bill Hatto