Iron ore port strike worries lift prices from two-year low

AngloGold Ashanti Ltd. (ANG), which owns the world’s deepest mine, will within two years trial new mining methods in South Africa to access almost $118 billion worth of gold lying more than three miles underground as it expects gold prices to keep rising from this year’s record. The world’s third-largest gold producer wants to gain access to an estimated 70 million ounces of gold more than 3.1 miles below the surface to extend the lives of its South African mines. The metal is worth $117.6 billion at current prices.

Australian shares have fallen to levels not seen since the GFC as investors reacted to the carnage on Wall St and European markets overnight. The local market shed more than $50 billion on Friday, and around $100 billion in the week, the worst performance since November 2008. RBS Morgans private client adviser Bill Bishop said developed economies had reached a point where there appeared no clear way to avoid an economic downturn.

Peabody Energy Corp. is leaving the door open for a rival bidder to step in for Macarthur Coal Ltd. by offering less for the Australian mining company than it did last year, even as profit is projected to double.

Bloomberg reports palladium and platinum fell today as amid concerns that the global economic recovery may stall.

Talon Metals has cranked up the resource estimate for its Trairão iron ore project in Brazil by 60%, the company said today, which puts the inferred resources at over a billion tonnes. Talon, based in British Virgin Islands, added another 414 million tonnes with an average grade of 33% Fe to its existing two target areas, bringing the total amount of iron ore to 1.102 billion tonnes.

Russia's Uralkali, who together with Belaruskali and North-American producers represented by Canpotex, control almost 60% of world production, said on Thursday its trading company raised prices for India by 32%. Uralkali's export arm will supply 1.2 million tonnes to India at $490/tonne (up from $370/tonne) through the end of March 2012. On Wednesday arduous negotiations between Canpotex and India ended in a two-step deal that increases the export price to $470/tonne for the fourth quarter and adding another $60/tonne next year. India has some 55 million small farmers and is the world's number one importer at over 6 million tonnes per year.

Canada's largest uranium producer lost 23% of its profits in the second quarter, as uranium sales volumes declined. In announcing its second-quarter results Thursday, Saskatoon-based Cameco also lowered its industry forecast in the wake of the Japan Fukushima nuclear crisis, which has slowed the expansion of nuclear power in Japan and resulted in Germany deciding to move away from atomic energy by phasing out and shutting down nuclear reactors.

AngloGold Ashanti reported record quarterly profits on Thursday of $342 million, up a whopping 68%, boosted by the precious metal's longest winning streak in almost a century. The world’s third-largest gold miner cut production guidance by over 4% and said it expected its cash costs to rise as much as $80/oz however. The Johannesburg-based company's CEO said the gold market is entering "a perfect storm" and that gold could “easily” break through $1,700 an ounce. December gold reversed its record setting pace by midday on Thursday to trade at $1,661.70 after touching $1,684.90 in early trade.

Newcrest Mining suspended work at its Gosowong gold mine in Indonesia on Thursday after it said nine people, mostly mine workers or contractors, were killed when a helicopter crashed en route to the mine.