Dec 24, 2012

All Australia wants for Christmas is stronger iron ore prices

Iron ore prices -- key to Australia's economic recovery -- hit a six-month high last week. But the days of 10% growth in China are over, as the country ramps up its own mining operations. Are the salad days of iron ore prices over?

Michael Sainsbury — Freelance correspondent in Asia and <em>Little Red Blog</em> Editor

Michael Sainsbury

Freelance correspondent in Asia and Little Red Blog Editor

Chinese demand for iron ore and the price of Australia’s biggest export — by some stretch — has been instrumental to our economy’s success these past four years as most of the rest of the western world has struggled. Last year Australia exported A$64.1 billion worth of the commodity, up 13% from the year before and from $5.3 billion in 2001.

After plunging to $60 per tonne during the global financial crisis it has again been happy days for mining companies — earlier this year iron ore hit a record price of $191.50 per tonne. The big three iron ore producers — Rio Tinto (London-based), BHP Billiton and Fortescue Metals Group — were making hay, shipping record volumes at record prices. All three companies had pushed the button on major expansions to their mines in Western Australia’s Pilbara region. The market loved them, as China appeared to defy the trend of recession around the globe.

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One thought on “All Australia wants for Christmas is stronger iron ore prices

  1. PaulM

    Price is one thing. Revenue (price times volume) is another. Having worked in the mining industry from ’87 to ’97, I well recall when iron ore sold for $20 per tonne. All those who say the mining boom is over should reflect on the expert dollar figures for iron ore, with 2001’s $5.3 billion as a bench mark. The salad days may be over, but we are still a long way from a limp lettuce.

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