BHP CEO Defends Iron Ore Strategy

The CEO of BHP Billion (ASX:BHP) said the company’s strategy of high-volume iron ore production is the best way to make a profit in less than desirable market climes.

According to Reuters:

BHP has said it intends to boost production at existing assets by 65 million tonnes to 290 million a year by June 2017 and plans to cut its production costs to overtake rival Rio Tinto as the cheapest iron ore supplier to China.

Andrew Mackenzie, CEO of BHP, told reporters:

The lowest-cost producer has a right to continue to produce at very high margins in a free market. We have always been of the view that the iron ore market is more likely to decline than rise, and therefore producing the maximum amount we can now is very sensible.

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