It will be 'survival of the fittest'

It will be 'survival of the fittest'

The recent price slump is simple to explain, according to Mr Treadgold.

"There's too much iron ore and not enough buyers. It is, of course, more complicated than that," he said.

He said the Chinese government crackdown on steel manufacturing pollution was putting pressure on the market, as was concern over troubled property developer Evergrande's future.

Both of these moves mean there is less Chinese demand for raw materials such as iron ore. There has also been a recovery in production in Brazil, which had previously been struck by a number of workplace accidents.

"It now becomes a very natural process which we see in nature called survival of the fittest," Mr Treadgold said.

"We've already seen one small miner fall over, that was Venture [Minerals]. Other high-cost mines will follow.

"The smaller, high-cost mines won't survive as they didn't 10 years ago."

It's a waiting game to see who will shut up shop in the wake of the price slump.

On Monday, junior iron ore producer GWR Group, which mines at Wiluna and ships through Geraldton, went into a trading halt on the ASX, pending an announcement about operations at its C4 Iron deposit, leading to speculation it may shut down operations due to the falling commodity prices.

Don't worry about FMG, BHP or RIO. They will all survive. The smaller players will simply fold up like many did when IO got as low as $35US/T many years ago.