Agnico Eagle expands stake in First Nordic to 13%
First Nordic is finalizing its acquisition of the Oijärvi gold project in Finland.
The bubble that is keeping iron ore prices at historic highs may be about to burst, and when it does, iron ore giant Fortescue Minerals will still be making money, the company’s new CEO predicts.
Neville Power, who recently took over the company helm from founder Andrew Forrest, said Fortescue could remain profitable at $70/tonne even if iron ore crashes $100/tonne from the current $176/t.
Australian Mining reported Power saying other companies won’t be so fortunate:
“We are making sure our business is capable of surviving in those sorts of environments,” he said. “There are lots of people who won’t survive a $US70 a tonne ore price.”
Power explained that the coming supply glut, combined with slowed demand from China, will surely put downward pressure on the iron ore price.
Commodities analysts are widely predicting the price of iron ore to drop when new supplies of the crucial steelmaking ingredient hit the market in 2014-15.
MINING.com quoted in May from a report, by the Australian Bureau of Agricultural and Resource Economics, saying that global exports of iron ore may gain 28% to 1.4 billion metric tonnes by 2016.
The new supply comes as iron ore miners rush to boost production to take advantage of current high prices, said MINING.com:
Brazil’s Vale — the world’s number one iron ore producer — and Australian heavyweights BHP and Rio Tinto have some $45bn slated for new mines. The cash price of 62%-iron ore shipped to China’s Tianjin port has almost tripled from Nov. 21, 2008 when data became available, according to the Steel Index.
Meanwhile, Fortescue said Monday it is better off going it alone on developing a new port for exporting iron ore in Western Australia, rather than teaming up with rival Aquila Resources, The Herald Sun reports:
Aquila, Fortescue and China Metallurgical Group were expected to work jointly on the development at Anketell Point, which would be used by all three.
Fortescue is instead working on a plan of its own after falling out with Aquila over the ultimate capacity at Anketell Point.
The proposed port would be an alternative to Port Hedland, where Fortescue’s facilities were expected to reach full capacity in the next few years.
Fortescue would begin using the new facility once its production reaches 155 Mtpa from its current 55 Mtpa, said the Herald Sun.
