Lower iron ore prices had prompted BHP to put off a $20-billion expansion of its facilities at Australia's Port Hedland last year. The project would have eventually doubled the company's iron ore capacity to around 440 million MT per year. Instead, BHP is focusing on getting more out of its current operations.
“The aspiration would be, just by squeezing our current infrastructure with modest capital investments across our business, to be able to achieve around the 260 million tonne mark,” Jimmy Wilson, president of BHP's iron ore business, said in a November 15 Sydney Morning Herald article.
Vale CEO sees a steadier market in 2013
Meanwhile, Murilo Ferreira, CEO of Brazil's Vale (NYSE:VALE), the world's leading iron ore producer, remains optimistic about the metal's prospects. “I don't see a scenario that is as pessimistic as in September 2012, or as exuberant as 2008 and 2010, when prices reached $200,” he said in a January 10 Bloomberg article.In November, Vale received approval to expand the capacity of the Carajás railway in Brazil, which will increase the line's shipping capacity to 230 million MT per year. In addition, to improve its access to the Chinese market, the company is reportedly considering building an iron ore distribution center at a port in Southern China where steelmaker Baosteel is building a new production facility. Securities Disclosure: I, Chad Fraser, hold no positions in any of the companies mentioned in this article. Related reading: What Lies Ahead for Iron Ore Prices? Expanding Iron Ore Supply Weighs on Price Riding the Iron Ore Roller Coaster from Iron Investing News