BHP Billiton, the largest mining company, sees steel production in China increasing to 1.1 billion tons in the next 10 years as urban development drives long-term demand.

“China’s urbanisation has a long way to run and that is going to require a lot of steel,” chief executive Andrew Mackenzie said yesterday, as he concluded a tour to visit customers in Asia. China produced 779 million tons of steel last year, according to the World Steel Association.

China’s Premier Li Keqiang last month called on regional authorities to help stabilise expansion as the nation seeks to meet its economic growth goal of about 7.5 percent.

The second-largest economy is projected to grow 7.3 percent this year, which would be the weakest pace since 1990, according to a survey of analysts last month.

“There’s a bit of overcapacity in the property market, which probably led to temporary softening in the demand growth for steel,” Mackenzie said. “Hopefully there will be renewed growth, particularly growth in the way of making more use of high-quality, low-cost iron ore and metallurgical coal produced by Australia. We are ready for that.”

BHP Billiton raised its full-year iron ore output guidance in April to 217 million tons, while Rio Tinto posted record first-quarter output, swelling global supply.

BHP Billiton got 43 percent of its earnings before interest, taxes, depreciation and amortisation from iron ore in the 12 months to June last year. – Bloomberg