BHP BILLITON JOINS RIO TINTO AND CUT ITS IRON ORE PRODUCTION FORECAST BY 4%

BHP Billiton, the world’s biggest mining company, cut its iron ore production forecast for its Australian mines by 4 per cent because of bad weather and rail network maintenance, adding to bullish signals for the global market.

Output from its mines in Western Australia may be 260 million metric tons this fiscal year, Melbourne-based BHP said on Wednesday in a statement. Rio Tinto Group lowered its iron ore production forecasts, citing delays in implementing a driverless train system in the nation’s Pilbara region.

Iron ore has extended a rally above $60 a metric ton as steel prices and output surged in China after policy makers bolstered growth and the property sector rebounded. The forecast reduction by Rio, the world’s second-biggest exporter, may see market sentiment turn more positive, especially with BHP’s expected cut, according to an UBS report on Tuesday.