Frik Els , Editor

New York brokerage GFI's announcement on Tuesday that it now offers on-screen iron ore swap trading is the latest indication that the economics of the world's foremost dry bulk commodity are being changed fundamentally. Started in 2008, derivatives trading in iron ore is up fourfold this year after setting a record in July as investment banks enter the massive market in numbers. The world's top three miners – BHP Billiton, Vale and Rio Tinto – control nearly 70% of the 1 billion tonne annual seaborne trade and dominate price talks. The benchmark China import price for iron ore has tripled since late 2008 to $177 a tonne.

Canadian Natural Resources said on Tuesday its Horizon oil sands operation has resumed production after a seven month gap caused by a fire. The Calgary-based company said expects to reach full capacity of 110,000 barrels per day of syncrude – a light oil manufactured from bitumen – by next week. The Horizon outage led to a shortage of syncrude which helped Alberta’s producers attract a premium of $18 above benchmark US oil. That premium is now shrinking and is set to return to normal levels of a slight discount. Last week the spread between US crude and North Sea Brent reached a record margin of $26 a barrel. Western Canada Select in turn trades at $13 a barrel below US levels which on Tuesday was $84 a barrel.

Gold futures dropped for the first time in more than a week on Tuesday as global equity markets posted gains, buoyed by better-than-expected data from China. Gold for December delivery fell $19.80 or 1% to $1,873.50 an ounce at the start of trade in New York's Comex. On Monday the December contract rose $39.70, or 2.1%, Monday to settle at $1,891.90. Bullion is up 16% in August, heading for its best monthly performance since September 1999. Silver for December delivery in New York declined 1% to $42.94 an ounce after earlier touching $44.295, the highest price since May 3. It’s up 39% this year.

Gold futures hit another record high of $1,898.60/oz on Monday, despite a recovery on global stock markets following one of the most volatile weeks in trading history. The precious metal rose by more than 6% last week, the most since February 2009. So far this year bullion has gained roughly a third in value. Gold's allure as an inflation hedge was boosted by renewed talk that policy-easing initiatives would be unveiled by the US Federal Reserve on Friday at an annual gathering of central bankers. A round of asset purchases that eventually became known as “QE2” were unveiled at the meeting last year.

The battle for Macarthur Coal is poised to intensify after news that Anglo American is considering a challenge to Peabody and ArcelorMittal's $4.7 billion hostile bid. Anglos, the world's fifth most valuable miner, is studying Macarthur's finances, media reported at the weekend. Anglos has been restructuring aggressively under chief executive Cynthia Carroll (pictured) and with second quarter 2011 profits of $4 billion has the necessary cash. But a rumoured joint bid with China's Citic could turn out to be the decisive factor to beat Peabody and ArcelorMittal's offer as Citic has already built up a 24% stake in Macarthur. Miners are scrambling for coal assets and coal for power-generation has averaged about $130/tonne this year from less than $100 in 2010. Coal now accounts for 30% of global energy use, the highest since 1970.

South Africa’s Department of Mineral Resources, defending itself in court after awarding prospecting rights to a company linked to President Jacob Zuma’s son, will seek criminal charges against the plaintiff Sishen, part of Kumba Iron Ore, a company controlled by Anglo American. Kumba and Indian iron ore giant ArcelorMittal are asking the High Court to overturn the award of prospecting rights for the Sishen mine to Imperial Crown Trading 289, whose owners include Jagdish Parekh, a business partner of Duduzane Zuma. Kumba says it’s the only party eligible for the rights to the nation’s largest iron ore mine.

The Times and Democrat reports in the ancient town of Rosia Montana in Romania (pictured), tensions are running high between supporters and opponents of the proposed gold mine by Canada's Gabriel Resources. Gabriel Resources in its latest financial results showed it has accumulated over $175 million in cash and equivalents to move ahead its Transylvania project in an area where galleries used by Roman miners during the first century still exists. It has been more than a decade since the company first obtained the Rosia Montana concession, believed the be one of the richest in Europe, holding some 10 million ounces of gold and 65 million ounces of silver, and it needs several more endorsements, zoning permissions and reviews before it could start mining.

While there is disagreement over the near term direction of the gold price, former and current chiefs of Goldcorp, the world's number two gold miner, almost agree on its longer term prospects.

The Business Standard reports with gold prices setting new record highs every alternate day, jewellery makers are adopting various methods to minimise its use in diamond jewellery without compromising look and feel. While many have increased mechanisation and reduced manufacturing of hand-made jewellery, others are replacing gold’s weight with diamond to keep investors’ interest intact. Another option is using silver with rhodium plating. Ideally, gold content in diamond jewellery should be 35% in terms of its weight. But, many jewellers have reduced gold content massively in the first half of the calendar year to keep the prices down.

Australia's Fortescue Metals, barely four year after starting commercial mining, said on Friday its year-on-year net profit surged 76% to just over $1 billion driven by resilient demand from China. Shipments by the world's number four exporter rose only slightly to 40 million tonnes, but the price it achieved jumped 68%. BHP Billiton, the world most valuable miner, is set to report a record $22 billion in annual profit on Wednesday thanks in large part to its iron business. The stellar numbers come as global blast furnace growth over the next five years is predicted to rise by a staggering 300 million tonnes as China's construction boom continues unabated. On top of that India's iron ore exports could halve over the same period further bolstering prices that in percentage terms have outclassed even that of gold as the world economy recovered post the 2008 collapse.