MANILA – While this year’s spectacular rebound in iron ore prices has been a godsend for the world’s biggest miners, it has not gone high enough for smaller, less-efficient producers that still have pits shuttered and equipment idle.
The price of the steelmaking material has nearly doubled in 2016 to above $80 a ton, a boon for miners such as Vale, BHP Billiton and Rio Tinto which extract the material at a cost of less than $20 per ton.
But smaller producers from China to Sweden still face hard times as their output costs can be as much as $100 a ton due to lower grades and fewer economies of scale. “Every mine I know remains shut down,” Pan Guocheng, chief executive of mining company China Hanking Holdings Ltd, told Reuters by phone.
He said about half of production capacity is closed in China’s northeastern province of Liaoning, where Hanking’s mines are located. The company has shut three smaller mines in the last few years. “This price increase is not sufficient enough to let (mines in the province) reopen with some new capital injections.”
Hanking is among a handful of privately-owned iron ore miners still in business in China, with many closed as a global glut slashed prices to a record low of $38.30 a ton in December, 2015 from a peak of $191.70 more than four years earlier.
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