In the longer term, Africa holds the key to global iron ore price trends, CRU Strategies CEO Phil Newman told the 20th Annual Investing in African Mining Indaba in Cape Town on Monday.

He said the Simandou iron ore project in West Africa, whose major backers were Rio Tinto and Chinalco, was a large project and its production costs could make a $10/tonne difference to the price if or when it came on stream.

Simandou has been controversial partly as a result of the big capital cost for both the mine and associated necessary infrastructure.

Mr Newman said technology and political interference would make a big difference to the supply of minerals.

Both Brazil and India had lost market share in iron ore largely as a result of government interventions and Australia had filled t his gap. But China had used technology and political intervention to exploit low quality domestic iron ore resources that Western countries would reject.

Magnus Ericsson, executive director of IntierraRMG (which is now part of SNL Metals and Mining), said the price of iron ore was expected to be between $100 and $120/tonne by 2020 from more than $130/tonne at present.

H is estimate was more optimistic than some forecasters because he had factored in supply constraints as a result of barriers to expanding production including the squeeze on financing for junior miners.

Mr Ericsson did not expect the major producers would increase production to a level that would flood the market with iron ore. He also expected China’s own iron ore output to decrease and its imports to increase.

Steel demand growth was expected to be about 2.7% a year between 2012 and 2021 with particularly strong appetite from Africa and South America, Mr Ericsson said.