Six years after a once-in-a-generation commodities crash forced Noble Group to close the Frances Creek iron ore mine in remote northern Australia, its new owners are restarting it.
Darwin-based NT Bullion is among a host of junior miners from Australia to Canada that are resuscitating operations abandoned by larger producers of the steelmaking ingredient.
Their bets made at the bottom of the mining cycle could prove lucrative. The price of iron ore surged 65 per cent last year to a nine-year high of $166 a tonne on the back of sustained strong demand in China and supply constraints in Brazil, the world’s second-biggest producer.
“At current prices, it gets close to a $100 per tonne margin for us,” said Rodney Illingworth, managing director and co-founder of NT Bullion.
Analysts forecast prices to remain above $100 a tonne in 2021 with the four largest producers — BHP, Rio Tinto, Vale and Fortescue — unable to significantly expand production. After that, they expect prices to fall back with Brazilian supply recovering faster than global steel production.
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