MELBOURNE, Australia (AP) -- Australian iron ore miners Rio Tinto Ltd. and Fortescue Metals Group Ltd. said Monday they have each cut their annual production by 10 percent due to weakening demand from China.
The move follows a decision last month by Brazil's Vale, the world's largest iron ore producer, to cut its annual ore production by 30 million metric tons as demand for steel crumbles because of the global economic crisis. BHP Billiton Ltd., the world's third-largest iron ore producer, said it had no plans to cut production.
Rio Tinto chief executive Tom Albanese said he believed the slowdown will be temporary.
"We believe this will be a short, sharp slowdown in China, with demand rebounding over the course of 2009, as the fundamentals of Chinese economic growth remain sound," Albanese said in a statement.
Rio Tinto dropped its iron ore shipments from Western Australia by about 20 million metric tons, to between 170 and 175 million metric tons, the company said in a statement
Fortescue, Australia's third-largest iron ore producer, has moved up a planned shutdown of port and mine processing facilities to upgrade them, reducing 2008 output by 2 million metric tons.
The Reserve Bank of Australia said Monday that China's annual growth rate had fallen to a "still-rapid" 9 percent in the year to the end of September because of measures to restrain domestic demand.
The central bank also said in its monetary policy statement that it was increasingly clear that global commodity prices had peaked and lower prices are expected.
Steel companies worldwide have initiated significant cuts to production as the global financial crisis leads to weakening demand for iron ore, a key steel-making ingredient.
Shares in Rio Tinto gained 7.9 percent to close at 78 Australian dollars, BHP Billiton added 7 percent to AU$29.89, and Fortescue Metals fell 5.8 percent to AU$2.45.
