Iron ore slumped into a bear market on concern that slowing economic growth in China, the world’s biggest buyer of the steel-making raw material, will hurt the outlook for demand as global supplies increase.
Rio Tinto Group, the world’s second- biggest mining company, is on track to cut $2 billion in costs this year across its mining and corporate offices, joining BHP Billiton Ltd. and Vale SA in trimming spending.
BlackRock Inc.’s Evy Hambro, who manages the $10 billion World Mining Fund, says he will seek talks with Rio Tinto Group management on a planned iron-ore expansion that some analysts say will result in lower prices.
Mining companies led by BHP Billiton Ltd. are holding the biggest ever sale of assets this year just as commodity prices head into a bear market. What’s bad timing for the miners might be the opposite for private equity.
Rio Tinto Group, the world’s second- biggest miner, will probably pursue a $5 billion expansion of its iron ore output in Australia, Chief Executive Office Sam Walsh said, according to two people present at a meeting with investors and analysts.
Global iron ore supplies will expand faster than demand over the long term, lowering prices and reducing volatility of the raw material used to make steel, according to BHP Billiton Ltd., the largest mining company.