What to do about your miners? BHP & RIO Miners Background: Iron ore prices are well down from their glory days, declining some 42% over the past year and 79% from their peak pricing at US$194 a ton in February 2011.   Why have prices fallen so hard? China initially led the “Mining Boom” via its rapid capital investment led economic expansion. Demand for many basic materials rose sharply after 2000, driven by China’s surge in industrial growth. The Chinese demand propelled a doubling of global steel production in the last decade, the primary driver of iron ore demand. However, over the past few years China’s growth rate has been moderating and as a result the demand for ore is also falling.   The attractive margins that the iron ore producers were archiving in their hay days attracted a multitude of smaller higher cost producers to the industry. Over the period of strong production growth from 2000, the diversity of iron ore supply broadened sharply (see chart below) and accordi...