While iron ore prices slid for most of the year, the majors have persistently ramped up volumes, a tactic which has caused criticism from smaller miners that they’re canabalising the sector and squeezing companies out of the market.
Overnight BHP Billiton shipped its billionth tonne of iron ore to China from its Australian operations. It’s a milestone which demonstrates how quickly Australia’s mining industry has grown during the most recent investment boom. It took BHP almost 30 years to ship 100 million tonnes of iron ore to China and then only 12 more years to reach the one billion tonne milestone.
Despite Chinese demand for the commodity falling slightly this year, BHP CEO Andrew Mackenzie said China is of immense importance to BHP Billiton and to Australia.
“BHP Billiton is very proud of the role it has helped play in China’s remarkable economic and urban growth through the trade in iron ore and other commodities. The rate of this growth, and the demand for iron ore, has been unprecedented,” he said.
Speaking at a celebratory event in Shanghai, the company’s President HSE, marketing and technology Mike Henry acknowledged China’s phenomenal growth over the past 20 years and the impact that’s had on the global iron ore market which achieved record prices well above $100 a tonne as a result.
“Thanks to China’s tremendous achievements in manufacturing and steelmaking, part of the iron ore we export comes back to Australia as high-quality infrastructure and equipment. The resources industry now relies on bulk materials handling machines, transportable buildings and rolling stock made in China,” Henry said.
BHP shipped its first load of iron ore to China more than 40 years ago from Port Hedland in Western Australia. China now accounts for nearly 50% of the world’s total steel production.
“Chinese demand growth has supported a trebling of BHP Billiton’s iron ore production over the last two decades,” BHP iron ore boss Jimmy Wilson said.
“Over the past decade, we have invested $US25 billion in our Western Australian mines, rail and port infrastructure to deliver the high-quality iron ore needed by our steel-making customers in China.”
Overnight iron ore for March was at $67.96 a tonne.