When the rout in prices ends for the world’s iron-ore producers, those left standing probably will have more robots on their side.

Automated drills and driver-less trucks are among the new tools employed by the four biggest companies, including BHP Billiton Ltd., in a bid to preserve profit margins during a bear market that began more than two years ago. Using more technology helped reduce costs at Rio Tinto Plc by 8 percent since 2013, even as it boosted output by 5 percent, according to Paul Young, an analyst at Deutsche Bank in Sydney.

Improvements by top producers is defying a productivity collapse for the rest of the mining industry, which consultant McKinsey & Co. says declined as much as 28 percent in the past decade, forcing smaller operators to shut. With demand for iron-ore slowing in China, the world’s biggest user, prices are probably headed lower as major suppliers expand output by tapping low-cost reserves, mostly in Australia, according to Citigroup Inc. The top four companies will see their share of the global market jump to 79 percent in 2018 from 64 percent in 2010, the bank said.

“Higher productivity is certainly an advantage” because those companies “would be the last ones to shut down in a low-price environment,” said Jessica Fung, an analyst at BMO Capital Markets in Toronto.

Price Slump

The benchmark price of iron ore imported by China has plunged 69 percent from a peak of $191.70 a metric ton in February 2011 to $59.01 on Thursday, heading for a third straight annual loss, according to Metal Bulletin. Even with the decline, top producers remain profitable.

The cash cost of mining the ore on average is $15.80 a ton at Vale SA, $16 for BHP, and $16.20 at Rio Tinto, according to company data compiled by Bloomberg Intelligence.

With big companies still making money on iron ore, seaborne supply will exceed consumption by 58.1 million tons this year, and that surplus will peak at 107.4 million tons in 2018 and persist through 2020, Morgan Stanley said June 22. The push to get more efficient and use more automation is helping to drive the output gains, Citigroup said.

The race to increase market share as prices drop has already intensified competition among miners. Andrew Forrest, the founder of Fortescue Metals Group Ltd., said Aug. 24 that expanding output is causing “self-harm when industry leaders do it.” The persistent oversupply is “damaging the credibility of the industry,” Glencore Plc CEO Ivan Glasenberg said in May.

Smaller, higher-cost mines have been forced to scale back. Cliffs Natural Resources Inc., the largest U.S. producer, halted operations at Bloom Lake in northeastern Quebec in January. Other mines that were idled include Sinosteel Midwest Corp.’s Blue Hills in Australia and IMX Corp.’s Cairns Hill, Goldman Sachs said in a June 8 report.

Declining Productivity

“The companies that thrive will be those that are the most productive and efficient operators -- and we are -- and those who remain at the bottom of the cost curve -- which we will,” Rio Tinto CEO Sam Walsh said on an Aug. 6 earnings call. “Our highly sophisticated autonomous trucks demonstrate the value of our technology.”

Operating costs across the mining industry, which had improved productivity in the lean years of the 1980s and 1990s, “got badly out of control” over the past decade as companies boosted output to satisfy booming global demand, McKinsey said in a May report.

London-based Rio Tinto unveiled its “Mine of the Future” program in 2008, when commodity prices were surging to records. The aim was to deploy more technology and more efficiently access deep ore bodies while improving safety for workers. From 10 driver-less trucks in 2012, the fleet has expanded to 66, according to the company.

The vehicles can run 24 hours a day, 365 days a year, without a driver who needs bathroom or lunch breaks. Each truck can save more than 500 work hours a year, according to Michael Murphy, chief engineer of mining technology at Caterpillar Inc., a supplier of autonomous mining equipment to BHP and Fortescue.

Driverless Trucks

One worker at a computer screen can monitor as many as 50 driver-less trucks, Murphy said. Savings are even greater with autonomous drills inside an underground mine, where laborers using traditional equipment can take hours to walk from the opening to the work site for each shift, and they operate in dangerous conditions, he said.

In the case of Rio Tinto, the number of injuries per 200,000 hours worked last year had dropped to about 0.6 from about 1.8 in 2003, Michael Gollschewski, managing director at Rio’s Pilbara mines in Australia, said in a presentation to analysts on July 16.

Productivity rose 4 percent last year in Australia, which has mines run by Rio Tinto, BHP and Fortescue, which together control 54 percent of supply, according to Christian Lelong, an analyst at Goldman Sachs Group Inc. in Sydney. Automation is helping cut costs that are already being eased by lower oil prices and weaker currencies of exporting countries, Deutsche’s Young said.

The rest of the industry is taking note. About 69 percent of the 190 mining companies in an International Data Corp. said they are reviewing remote-controlled equipment, while 29 percent are considering more robotics. Data intelligence, integration and new technology like advanced robotics are changing the nature of mining, the researcher said in a statement Aug. 25.

“The iron-ore majors have gained significant market share as they brought new low-cost capacity online, and high-cost miners have shut down capacity because they were losing money,” said Christopher Lafemina, an analyst at Jefferies LLC in New York who has a buy recommendation on Rio Tinto.