News

March 03, 2010

Batavia Mining’s Roper Bar Iron Ore Project In Northern Territory Looks A Simple, But Lucrative, Proposition

By Alastair Ford

Iron ore prices are once again on the rise. Contract buyers now look likely to settle for something in the order US$121 per tonne, as against US$61 last year, as the spot market price gains ever-increasing influence as a major benchmark. It’s a remarkable switch-around in what’s been a remarkable market over the past few years, as iron ore prices have soared in response to Chinese growth and the supercycle, and then crashed as a result of the credit crunch.

Now prices are once more on the rise, and it looks as though the age-old standard price-setting mechanism, whereby contracts with all the major steel mills in the Far East are negotiated individually with all the major producers, is unravelling. Rio Tinto’s Tom Albanese has said the benchmark system must evolve or it will break, while BHP Billiton’s. Marius Kloppers has repeatedly called for moves towards market-relating pricing.

This comes after the Chinese held out for too big a reduction...