The three-digit trading prices of iron ore currently enjoyed in the world market has been predicted to plummet in the next seven years to a tight two-digit price with the influx of African type iron ore, a new research has shown.

From the present $150 per tonne, the key steel-making ingredient will drop to a hard thud $80 per tonne average in the years through 2019, a joint report partly funded by the federal Department of Resources, Tourism and Energy said.

Luke Hurst, an economist at the Australian National University's Crawford School of Public Policy, who authored the report, however, noted the figure could still be conservative. He said prices of the raw commodity could further dive to $60 per tonne if Africa releases more iron ore into the global market than what they had assumed.

But BHP Billiton, the world's largest mining company measured by 2011 revenues and as of February 2011 was the world's third-largest company measured by market capitalisation, refused to be threatened by the African iron ore frontier.

In a report by The Age, Ian Ashby, BHP Billiton's departing iron ore boss, said it is quite improbable for Africa to produce and release into the global market such a magnitude supply of iron ore within the subject timeframe in the report primarily because the region has yet to create and establish a major and substantial port and rail infrastructure to even rival that which the Pilbara region has.

"Projects that were far from the coast would particularly struggle... Political instability would also undermine the region's prospects," The Age reported, quoting Mr Ashby.

Most analysts have predicted prices of iron ore will start falling by 2014 amid the influx of large amounts of supply into the world market. But Mr Ashby said the probable influx will be brought by Australia and Brazil. West Africa could give some contribution, but not as much as the report's assumptions saw.

Based on a study of 17 key iron ore projects in West and Central Africa, the joint report by the federal Department of Resources, Tourism and Energy aimed to provide new estimates on the new additional production capacity according to their level of risks and likelihood of success.