BHP will restrain the growth of iron ore production

The largest mining company BHP Billiton released its operational report, which includes at least one big surprise for investors: BHP will slow down its iron ore expansion program.

In particular, the company announced that it is going to postpone its Inner Harbor project, which will make it impossible to achieve production of 290 million tons per year, which the company originally planned to achieve by 2017, and now expects to reach 250 million tons in 2015.

BHP, along with other major miners Rio Tinto and Vale, have mercilessly increased their iron ore output in a bid to become the cheapest ore producer. This activity has resulted in the price of iron ore holding near a 10-year low in recent weeks.

However, while the slowdown in BHP expansion is undoubtedly good news for the troubled iron ore market, the company's goal of achieving the lowest cost of metal recovery remains unchanged. The focus remains on production at the lowest possible price of around $ 20 per tonne as productivity continues to improve.

In addition, it is worth noting that the BHP movement began following Rio Tinto's announcement that the expansion of Pilbara's infrastructure was nearing completion at the end of the first half of 2015. Overall, the company expects production of 350 million tonnes of iron ore from Canadian and Australian mines in 2015. However, some market observers believe the news from BHP will prove to be a boon for the industry.