The announcement was followed just after the release of statements by both Rio Tinto and BHP Billiton, stating that, the companies are taking initiative to increase iron oreproductions in the mines of both the respective companies
Three of the companies, contributes over 60 percent of the total global market. The increase of production in three of these giant iron ore producers, will not prove best for the steel making raw material, or the high cost resource developers in Western Australia.
The premier of western Australia, Collin Barnett, had suggested earlier that, the big iron ore producers are together, increasing their production in order to drag down the price of iron ore in the global market, as well as to pull out the rival producers.
The Chief Executive Officer of Vale, has announced that, the expansion of iron ore production is based on the strategy of the company to dispose the iron ore produced by the company’s competitors. The statement by the company is surprising as, at the current market value of iron ore, not6 much of the iron ore producers are being profited. If the price declines further, many high cost producers will, sadly exit the market.
The big miners sticks on to the reason that, the increase in iron ore production might decline the price of iron ore, but when the high cost producers exit from the market, the volume declines, and the price of iron ore would rise once again.
Yaang Pipe Industry