Hunan Gold shares surge after large deposit found in China
The Geological Bureau of Hunan Province said on Thursday that it had detected more than 40 gold veins containing an estimated 300 tons of the precious metal.
A recent dive in iron ore prices spurred by China’s slowing economy has dragged down the share prices of major Australian miners.
Iron prices have plunged through the USD$120 bottom outlined by mining executives Nev Power of Fortescue Metals and Rio Tinto chief Tom Albanese earlier in the year, sliding to $US88.70 overnight.
The USD$120 price level is considered by many analysts to be the lower threshold of profitability for miners, as it is the marginal cost of domestic Chinese iron ore production.
Leading Australian iron ore miners have taken in a beating in the past week as a result of iron ore’s dive, with Rio Tinto (ASX:RIO) down 5%, Fortescue Metals Group (ASX:FMG) down 11%, BHP Billiton (ASX:BHP) down 4% and Atlas Iron (ASX:AGO) down 16.5% over the past five days by the end of Friday trading.
According to the Australian ANZ analysts in Melbourne indicated following a site tour to China that the Chinese government is subsidizing both steel and iron ore production and that a price rebound may require a wait.
One commentator has recently speculated that China is behind a concerted effort to reduce iron ore prices due to the critical role of steel in the country’s modernization push and its heavy dependence upon external suppliers.
The ongoing decline in Fortescue shares has also compelled Fortescue founder and chairman Andrew Forrest to raise his stake in the company by AUD$39 million.
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