Speaking at the Global Iron Ore & Steel Forecast conference in Perth, BHP vice president planning iron ore Tony Ottaviano said that given the continuing decline in steel intensity per unit GDP growth, low cost supply planned in Australia and Brazil will eventually meet and exceed incremental Chinese demand.

The company expected Chinese steel demand to grow at half the predicted GDP growth rate of 7-9% and is planning for Pilbara iron ore growth projects to reflect this stable trend.

Ottaviano said urbanisation and industrialisation would continue to sustain GDP growth at the government’s targeted rate and commentators had been too bearish about rising inflation and real estate bubble worries within the country.

“However, just as many commentators have been too pessimistic on China in the past, we caution those who now expect growth rates to rise significantly from this point onwards,” he told delegates at the annual event.

“Infrastructure investment and fiscal policy is likely to be adjusted in a measured manner to underpin stable growth rather than cause a sharp acceleration in activity.”

Ottaviano said BHP was pursuing correspondingly measured growth initiatives at its Pilbara iron ore operations, including debottlenecking of supply chain assets and optimisation of existing equipment and infrastructure.

He emphasised the conservative nature of the upgrades, noting that optimisation of productivity enablers would be a matter of “relentlessly pursuing the basics.”

“We’ve been deliberate in our approach here,” he said of the company’s autonomous equipment program.

“The last thing you want to do is have an out of control process and then simply automate that out of control process.

“Getting those processes simple and focused is critical in applying the technology.”