SYDNEY—As iron ore collapses to a decade low, in remote northwest Australia one of the world’s richest women is preparing for the first cargo of the commodity from her massive new mine to set sail.
Gina Rinehart’s Roy Hill iron-ore mine, which has been years in the making, will pour millions more tons of the steelmaking commodity into the global market at a time when concerns about oversupply have driven prices to US$40 a metric ton for the first time since 2005.
On Thursday, the value of the commodity tumbled 0.7% to US$40.30 a metric ton, according to The Steel Index. That benchmark is down 19% since the start of November, and off nearly 80% since its peak in early 2011.
The spectacular downturn of iron ore—the world’s second most traded commodity, after oil—is in part rooted in the massive expansion of mines, such as Roy Hill, in the iron-rich northwest of Australia, where the some of the world’s top miners including Rio Tinto PLC are producing ore at record rates.
Citigroup Inc. in September described Mrs. Rinehart’s project as an “impending whale” and said shipments from the new mine would help push prices below US$40 a ton.
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