Analysts are split on whether BHP Billiton can achieve its ambitious drive to claim Rio Tinto's mantle as the cheapest exporter of iron ore to China.
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The miner said on Monday it would slash its costs by 25 per cent to below $US20 a tonne and grow its exports by 65 million tonnes by 2017.
Deutsche Bank analyst Paul Young said the increase was faster and cheaper than expected, at a cost of $US30 a tonne for a total of about $US2 billion. But he questioned whether the miner's determination to reduce its costs by 25 per cent was achievable.
''Whilst targeting to be cheaper than Rio Tinto in China on a landed basis, we still think the gap can't be entirely closed,'' he said.
Citi analysts believe BHP's drive to surpass Rio Tinto is a possibility with a falling Australian dollar.
Citi noted that BHP's analysis is based on a constant Australian dollar of US91¢ and said with its expectation that the dollar would fall to US80¢ by the end of 2015, BHP could easily push its costs below $US20 a tonne by 2017.
UBS analyst Glyn Lawcock said BHP's ''impressive'' announcement would increase its net present value by about $US7 billion.