Iron ore projects, prices boom on China demand-AME
Booming steel output in China is triggering a wave of global iron ore mine expansions and new projects and will boost Australian contract prices in 2005/06 by over 20 percent, analyst group AME Mineral Economics said.
Neither accelerated mine capacity expansions nor measures to cool China's overheated steel sector had removed tightness from international iron ore markets, AME said in a new study.
"Iron ore demand is at record levels and is set for continued strong growth," AME said on Sunday.The analyst forecast iron ore prices in Australia-Japan contracts for the year beginning April 2005 will rise by over 20 percent, after the 2004/05 rise of 18.62 percent to record highs.
Ambitious steel production projects in India and Brazil, together with industry revitalisation in Russia and elsewhere, would further boost global demand growth, AME said.
AME forecast that annual world iron ore consumption will grow to more than 1.6 billion tonnes by 2009 from 1.3 billion in 2004."Attracted like moths to the flame to this white-hot market, established producers large and small as well as new hopefuls are rushing to create extra capacity," AME said.
The three big global producers, Brazil's Cia Vale do Rio Doce (CVRD) , Rio Tinto Plc/Ltd (, and BHP Billiton Ltd, who between them control more than three quarters of seaborne iron ore trade, had already put massive expansion plans in place, AME said.
A raft of other proposed projects span the globe, from the major iron ore producing countries of Australia and Brazil, to India, Africa, and even Sweden and North America, it said.
Planned expansions include about 250 million tonnes by the world's big three, the report's author Dallas Horadam said.This includes CVRD's expansion of its main northern mine at Carajas to 100 million tonnes a year by 2008 from present levels of 70 million tonnes. CVRD also plans to open a new mine at Carajas to produce 60 million tonnes a year by 2010.
In Australia, the total includes BHP's plans to further develop its Area C mine in the Pilbara region of Western Australia. This, together with further development of the Yandi and Newman mines, will take its capacity up to 145 million tonnes a year from present shipping capacity of around 100 million tonnes.
(From Reuters, October 18, 2004)
__________