SYDNEY—The slump in iron-ore prices to near a decade low is turning the spotlight back onto the world’s biggest miners and their strategy of churning out ore at record rates.
While prices have been weak for a while, fears of a global glut have deepened in recent days following evidence of slowing steel output in China, the world’s biggest consumer of the steelmaking ingredient by far.
The price tumble comes at a bad time for big producers such as Anglo-Australian BHP Billiton and Brazil’s Vale SA, which are counting up the costs of a deadly dam failure at their jointly owned iron-ore mine in Brazil this month. The two firms are the world’s top shippers of iron ore, along with Rio Tinto.
Iron ore fell to $43.40 a metric ton Tuesday, down 12% this month and far below the 2011 high above $191, according to data provider the Steel Index. The price was unchanged on Wednesday.
BHP and Rio Tinto have drawn criticism from some investors, rivals and lawmakers, who have said they are depressing prices by digging up more than the market needs. Australia’s government in May considered holding a parliamentary inquiry into the matter, although that proposal was ultimately discarded.
The two Australian mining companies have said their expansions were planned years ago and are in the best interest of shareholders.
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