BHP Billiton
An official stands in front of a sign for mining company BHP Billiton outside the Perth Convention Centre where their annual general meeting was being held in Perth, Western Australia, November 19, 2015. Reuters/David Gray

After hitting a one-month high of $71.49 at the start of 2015, iron ore prices continued its decline and dipped to a near 10-year-low of $38 per tonne in December. Although it has improved to $50 this week, the commodity glut would likely last a decade.

Because of the global supply of mining commodities expected to last for 10 more years, BHP Billiton Chief Executive Andrew Mackenzie says the iron ore market would be one of the longest to come back into balance. He points out that a resurgence in iron prices, which slightly rose to past $60 in early May, is not sustainable due to an excess of global supply coming on stream in the next few years, reports the Australian Financial Review.

Mackenzie said on Monday at the Asia Society that impact of the large investments made by miners around the world in other bulk commodities, to include iron ore mines, would last for several years. While China’s demand for steel is expected to soften in the next three years, BHP, Rio Tinto and Vale of Brazil are expected to add 100mtpa of new capacity during the same period.

However, the chief executive notes that BHP is well placed in comparison to its competitors because of its low cost base and focus on efficiencies that the company could ride out the low commodity prices. Mackenzie adds that other commodities, such as oil and copper, experienced a natural decline due to pressure drops off and grade drop offs.

He urges the US to engage more with Asia and suggests the inclusion of China in the Trans-Pacific Partnership (TPP). Mackenzie points out now is the time for the US to lean in to Asia instead of leaning away. He adds connecting China and the US through the TPP would draw together and stabilise the world.

VIDEO: Tough Times Ahead for Iron Ore

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