UPDATE 3-BHP aims to slash iron ore costs to become cheapest supplier

lunes 6 de octubre de 2014 03:26 GYT

* Miners' focus has shifted to cost cutting on weak iron ore price

* BHP targets 25 pct cut in iron ore production costs

* Aims for production cash cost below $20 a tonne

* Big miners squeeze out smaller miners (Adds BHP iron ore chief, analyst comments)

By Silvia Antonioli and Sonali Paul

LONDON/MELBOURNE, Oct 6 (Reuters) - BHP Billiton aims to cut its iron ore production costs by more than 25 percent and squeeze more tonnes from its mines as it aims to overtake rival Rio Tinto as the world's cheapest producer, the world's largest miner said on Monday.

BHP, the No. 3 iron ore producer behind Brazil's Vale and Rio Tinto, outlined the cost-cutting and expansion plan even as iron ore prices have slumped 42 percent this year, as it sees demand picking up over the medium term.

"We will continue to squeeze the lemon because at the end of the day it's just so value accretive," Jimmy Wilson, the head of BHP's iron ore division, told reporters in a video conference ahead of an analyst tour of its West Australian mines.

Miners' focus has shifted to cost cutting as iron ore prices have dropped from about $190 a tonne in 2011 to less than $80 now, sinking to five-year lows as supply growth from the mega producers has exceeded demand growth by more than two to one.   Continuación...