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Highlights

  • Australian mining sub-index dips 1.2%, touching its lowest level since September 2024.

  • Iron ore price decline from Thursday continues to pressure resource stocks.

  • Rio Tinto, BHP, and Fortescue all fall sharply; mining sub-index now down 3.5% YTD.

Australia’s mining sector took a fresh hit on Friday, with the S&P/ASX 200 Mining sub-index (XMM) falling 1.2% to its lowest level since 12 September 2024, as sliding iron ore prices continued to drag down heavyweight resource stocks.

The sub-index, which reflects the performance of the country’s major miners, had dropped as much as 2.6% in early trade before paring some losses. The decline followed a sharp drop in iron ore prices on Thursday.

Iron ore—a key export and a major profit driver for Australian mining giants—has been under pressure amid signs of weaker demand from China, the world’s top consumer of the steel-making material. Concerns about China’s property market, which remains sluggish despite recent policy support, have weighed heavily on commodity markets in recent weeks.

Leading the downturn, shares of mining heavyweights Rio Tinto (ASX:RIO), BHP Group (ASX:BHP), and Fortescue Metals Group (ASX: FMG) all posted losses ranging between 1.4% and 2.6%. The retreat from these top miners significantly contributed to the sub-index’s drop, underscoring the sector's vulnerability to commodity price shifts.

The latest move extends the sub-index’s losses to 3.5% for the year to date, highlighting the challenges facing Australia's mining industry in 2025. Despite initial optimism earlier in the year, the sector has struggled to maintain momentum amid fluctuating demand signals from China and a volatile global economic environment.

Analysts say that further downside in iron ore prices could continue to impact profitability and capital expenditure decisions for major producers. For now, investors are closely watching for any signs of recovery in China’s steel production and broader economic outlook, which would likely serve as a catalyst for a rebound in both iron ore prices and mining stocks.