* Rising capital costs may impact ore supply expansion-BHP
* ArcelorMittal:Market unlikely oversupplied until late in decade
* Vale in talks with ports for Valemaxes, including China
By David Stanway and Ruby Lian
BEIJING, Feb 28 (Reuters) - The global iron ore market will remain tight until later in the decade because increased capital costs could delay some new projects, supporting prices that have more than doubled over the past three years.
Global iron ore demand, chiefly driven by top importer China, has been outpacing supply, and many analysts have predicted the seaborne market will start to be oversupplied by 2014 or 2015 because of massive expansion by top miners Vale , Rio Tinto and BHP Billiton.
Between them, the Big 3, which control around two thirds of the 1-billion-tonne global seaborne market, are planning to ramp up output by more than 300 million tonnes over the next three years.
But with rising costs set to delay greenfield projects, there is little risk of the global iron ore market being oversupplied until late in the decade, Simon Wandke, vice president and chief commercial officer of ArcelorMittal Mining, told an industry conference in Beijing on Tuesday.
"It is difficult to get a lot of projects online given the current environment," Michiel Hovers, vice president of iron ore marketing at BHP Billiton , said at the same event.
Hovers said that growth in supplies tended to fall short of market expectations due to delays and other issues.
BHP said there were no delays in its own expansion projects.
The 2008 financial crisis either cancelled or delayed 300 million tonnes of new iron ore projects, according to an earlier estimate by Standard Chartered Bank, fueling a sharp rise in prices to near $200 a tonne in 2011.
While prices have come off since, to around $140 a tonne currently, they are still more than double where they were in late 2008 and nearly triple the production cost of large miners, easily making iron ore their biggest money maker.
BULLISH ON CHINA
BHP said China's iron ore demand growth was set to continue, with 60 percent of its 1.3 billion population still living with low levels of per-capita steel consumption.
Hovers estimated that by 2025, steel demand from China's auto-sector alone was expected to add 100 million tonnes to the country's total consumption.
China, which buys 60 percent of the world's iron ore, imported more 686 million tonnes last year, up 11 percent from 2010.
Vale, the top iron ore producer, said a huge expansion of global iron ore output is needed as older mines become depleted.
"Our strategy is to continue maximising output even when supply becomes more balanced in future," said Luiz Meriz, president of Vale Minerals China.
Vale had invested $15.1 billion between 2010-2011 to boost production and to raise operational efficiency, Meriz said.
Apart from boosting production, Vale is also investing heavily on a fleet of mega dry bulk carriers to slash shipping costs to China.
But Beijing has banned the 400,000-deadweight-tonne vessels from its ports, citing safety issues and a protracted slump in its shipping industry.
As an alternative base, the Rio de Janeiro-based miner began operating a transshipment hub in the Philippines this month and is building a terminal in Malaysia that will be ready by 2014.
But Meriz said the company was in talks with countries around the world, including Japan and South Korea, to dock its fleet of Valemax giant ore carriers, and remained in discussions with China.
"We're in discussions with ports around the world, including China...and so far there has been positive dialogue," he said, adding that the acceptance of the vessels was a technical issue.
Asked whether China's steel industry group is opposed to the Valemaxes, vice-chairman Wang Xiaoqi said the association was only interested in securing raw materials that were fairly priced.