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Despite the oversupply of iron ore on global markets, the world’s largest producers are set to boost output, as new mines come online.

The world’s supply will increase by 15 million tonnes to 75 million tonnes this year, say analysts at Sanford Bernstein, an investment company. The bulk of the new stock will come from mega facilities in Brazil and Australia, with the Roy Hill mine in Pilbara, Western Australia the most notable addition. Roy Hill will ship its first ore in six months.

The iron ore glut has been exacerbated by the relative slowdown in China, where the government has acknowledged that that it may not meet its downwardly revised growth target of 7%. The Chinese property boom of recent years had fuelled an extraordinary phase in the global commodity markets, with the metals and energy sectors enjoying unprecedented buoyancy in recent years.

While China has been consolidating its domestic steel mills in an effort to address the glut, the new facilities will far outstrip the amount that is being taken out of the market.

Now, analysts are warning that prices will fall further still, in the week that they reached a five-year low. The iron ore sectors in Brazil and Australia are struggling to adapt quickly enough, with further closures and job losses expected.

“We are seeing continued scaling back of project plans, focus on driving efficiency to bring down costs and non-core assets being put up for sale to release cash.  For investors with an appetite for the longer term, the latter could present an opportunity to purchase great assets at a deflated price, particularly with the falling Australian dollar.”

“The strategy being adopted by some miners in Australia is selling off licences, projects and operations. But these assets will need to be particularly attractive in terms of quality over the longer term. For Chinese investors, Australia is perceived as high risk because of the high cost of development and operations compared to other mining jurisdictions,” Kate Terry, a resource lawyer at Pinsent Masons tells GTR.

Meanwhile, major mining companies have defended their decision to keep expanding their operations at a conference in Perth.

The Sydney Morning Herald reports that Rio Tinto’s iron ore chief Andrew Harding heaped blame on small producers, saying: “The reality is, as the price comes down, if you made an investment with your own funds or shareholders’ funds in a project that is not sustainable, and if the market place dips, that is your responsibility. That is not anyone else’s responsibility.”