SINGAPORE (Reuters) - Rio Tinto (Xetra: 855018 - news) , the world's No. 2 iron ore miner, is keeping output expansion plans for the steelmaking raw material intact, with global demand led by top market China likely to keep growing, albeit at a slower pace, a senior company official said.
The Anglo-Australian miner is boosting iron ore production by 70 million tonnes a year that will take output to 360 million tonnes annually by 2015.
"In this decade we, Rio Tinto, expect Chinese steel demand to continue to grow on average about 3 pct per annum," Alan Smith, head of iron ore marketing in Asia, told an industry conference in Singapore.
Smith also said the miner expects seaborne iron ore demand to grow by 800 million tonnes in the current decade, justifying Rio's plans to continue boosting output.
Rio Tinto, led by former iron ore head Sam Walsh who took over as chief executive this year, has vowed to cut more than $5 billion (3 billion pounds) in costs by the end of 2014. So far, the company has slashed hundreds of jobs and marked copper, coal and aluminium assets for sale or closure.
Its optimism on iron ore, which contributed 46 percent to revenues for the latest half-year, seems warranted, at least for now.
China imported 67.15 million tonnes of iron ore in April, the third highest on record and up 4 percent from March, customs data showed on Wednesday.
BHP Billiton (NYSE: BBL - news) , which itself is on track to lift iron ore output by 5 percent to 183 million tonnes in the year ending June 2013, also said Chinese demand will remain the key driver for the steelmaking commodity, but like Rio, acknowledged that demand there for steel will eventually peak.
"Supply growth is and will keep accelerating in coming years," BHP General Manager Alan Chirgwin told the same conference, adding the onset of new supply will translate into lower iron ore prices.
Chirgwin said BHP expects Chinese steel demand to peak at 1.1 billion tonnes by the middle of the next decade.
(Reporting by Manolo Serapio Jr.; Editing by Muralikumar Anantharaman)