Big iron ore miners go for volume

SYDNEY: Record iron ore output from BHP Billiton and other mining giants appears to defy logic, with demand for the steelmaking raw material cooling in top customer China and a price-eroding supply glut looming.

But the sector’s heavy guns are digging more for less to tighten their stranglehold on the world’s second-biggest commodity market, as competitors struggle. In mining parlance, this is known as a “rebalancing” strategy, designed to improve the operating margins of the majors to such an extent that smaller competitors or new projects may be all but squeezed out.