Iron Ore Production To Accelerate Until 2030, Study Says

by Stjepan Kalinic Benzinga Staff Writer

The global iron ore market could increase production over the next five years, with output surging as high as 2.92 billion tons by 2029. This trend could put additional pressure on leading exporters like Australia, whose currency has declined by around 20% against the U.S. dollar since 2015.

Per Mining Weekly, BMI's latest report expects iron output to grow at an annual rate of 2.5% until 2029—more than double the 1.2% growth it saw over the previous five years. Expansion of existing mines and new projects, like Guinea's Simandou, which BMI highlights as a long-term milestone, should drive this growth.

However, the report also warns that geopolitical instability and resource nationalism could cause delays, and after 2029, a lower price environment could push production into stagnation.

Global iron ore exports increased by 2% in 2024, reaching approximately 1.6 billion tons. Australia maintained its position as the world's top exporter, shipping 866 million tons—an increase of 1.4% year-over-year.

Brazil followed with 390 million tons, marking a 2.6% rise, while South Africa shipped 61 million tons, up 3.4%. China, the world's largest importer, brought in a record 1.24 billion tons in 2024, a 4.9% increase driven by stable steel production and lower prices for Australian fines.

Major mining companies also saw production increases in 2024. BHP BHP boosted output by 3% to 290 million tons, Fortescue Metals Group FSUMF increased supply by 2% to 194 million tons, and Vale VALE achieved a 2% rise to 328 million tons, its highest level since 2018.

Meanwhile, India's exports declined as domestic demand surged by 4% to 242 million tons, driven by growth in steel, pellet, and sponge iron production.

BMI has set an optimistic forecast for Brazil, expecting its ore production to rebound following a contraction around 2020. The firm forecasts a 3.1% average annual growth from 2025 to 2029, with output increasing from 463 million tons to 528.7 million tons.

This growth is expected to continue beyond 2030 as planned projects contribute to further expansion.

Still, China is expected to lag in market growth, boosting its output by 1% this year. Despite its effort to reduce reliance on ore imports, it faces a cost problem owing to lower-grade ore. India's iron ore production is projected to grow by 2% in 2024, reaching 284 million tons, but growth is expected to slow after 2025, with output forecasted to hit 306.5 million tons by 2034.

Australia, the global leader in iron ore, is set to increase output by 2.5% in 2025, with expansion projects such as Mineral Resources' Onslow Iron and Fortescue's Iron Bridge contributing to growth.

Yet, Rio Tinto has faced challenges due to resource depletion at Paraburdoo and adverse weather, with cyclones expected to impact shipments by 13 million tons in Q1 2025.

While cornerstone projects like Simandou offer a supply boost, declining prices and competitive pressures could reshape the industry – particularly if decarbonization efforts gain stronger momentum.

Price Watch: VanEck Steel ETF SLX is up 4.33% year-to-date.

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