Australia's iron ore sector is poised for substantial expansion, with output projected to reach new heights by 2026. This growth is underpinned by the successful ramp-up of existing large-scale projects and the launch of new initiatives across the country. Despite facing headwinds such as resource depletion at some mines and weather-related disruptions, the industry's strategic investments in capacity expansion and new ventures are expected to solidify Australia's position as a dominant force in the global iron ore market. The long-term forecast indicates sustained growth, reinforcing the nation's critical role in meeting global demand for this essential commodity.
The sustained increase in iron ore production is crucial for the global steel industry, highlighting Australia's strategic importance in the supply chain. The projected growth reflects a dynamic balance between maximizing output from mature operations and developing new resource bases. This ambitious trajectory also involves navigating environmental considerations and market fluctuations, ensuring that expansion is both economically viable and environmentally responsible. The ongoing commitment to innovation and efficiency within the Australian mining sector will be key to realizing these growth targets and maintaining its competitive edge.
Driving Forces Behind Australia's Iron Ore Surge
Australia, currently the world's largest producer of iron ore, is on track for a significant boost in its output, with estimates suggesting a 1.4% year-on-year increase to 967.8 million tonnes by 2025. This impressive growth is largely attributed to the successful scaling up of key projects, including MRL’s Onslow, BHP’s South Flank, and Fortescue’s Iron Bridge. Furthermore, the commencement of operations at the Western Range mine, a joint venture between Rio Tinto and China Baowu Steel Group, with a substantial production capacity of 25 million tonnes per annum, is set to further augment Australia's supply capabilities. These strategic developments highlight a concerted effort to enhance production capacity and meet increasing global demand.
Looking ahead, Australia’s iron ore production is anticipated to climb further, reaching 993.4 million tonnes in 2026, marking a 2.6% increase. This optimistic outlook is primarily fueled by the continued progress and expansion of existing operations such as Onslow, Western Range, and Iron Bridge. Additional impetus is expected from the planned initiation of new mining sites like McPhee Creek and Lamb Creek. Moreover, the re-opening of the Koolyanobbing mine in December 2025, following its acquisition by Yilgarn Iron Investments Pty Ltd, after a temporary suspension due to limited reserves and high operational costs, is expected to contribute significantly to the overall production volume. These new and reactivated projects are pivotal in securing Australia's long-term dominance in the iron ore market.
Navigating Challenges and Future Outlook
While the prospect of increased iron ore production is promising, the Australian mining sector has also faced and continues to address various operational adjustments and external challenges. These include the strategic winding down of BHP’s Yandi mine due to resource depletion and a reduction in output from Roy Hill, influenced by softer iron ore prices. Furthermore, adverse weather conditions, such as Cyclone Zelia in February 2025, have caused interruptions, impacting production schedules. The temporary closure of the Koolyanobbing mine earlier in 2025 underscores the complexities and variable factors that the industry must manage to sustain its output levels and operational efficiency.
Despite these moderating factors, the long-term forecast for Australia's iron ore output remains robust, projecting a compound annual growth rate (CAGR) of 1.1% to reach 1,094.6 million tonnes by 2035. This sustained growth will be supported by the commissioning and ramp-ups of several significant new projects, including Mulga Downs (2028), Rhodes Ridge, Marillana, Hawsons, and Ridley Magnetite (2030). These new ventures, alongside incremental gains from established operating hubs like Onslow, Iron Bridge, Western Range, West Angelas, and the Mt Newman Joint Venture, are expected to offset the impact of scheduled closures, such as Yandi (2026), Buzzard and Iron Ridge (2029), and Marandoo (2030), ensuring a steady and expanding supply of iron ore to global markets.