just spoken to sage, page-11

Absolutely

The Chinese want to get their paws on our Iron Ore, especially a company that Ding is Chairman of.

Check article from Herald Sun today:

"China demand could send iron ore price up 30 per cent

Article from: Stephen McMahon with agencies

September 28, 2007 12:00am


SOARING Chinese demand for iron ore is expected to push the price 30 per cent higher with resource giants BHP Billiton and Rio Tinto the big winners.

The expectation of a sixth-consecutive year of iron-ore price increases to more than $US65 a tonne propelled the mining heavyweights share price higher, dragging the benchmark ASX 200 index to another record high.

Yesterday, the index closed up 56.7 points at 6538.

The Australian dollar is another big winner from the higher commodity prices and the changing dynamics of the global financial market, yesterday reaching above US88c for the first time in almost two-months.

Since last week's US Federal Reserve interest rate cut, the Aussie has jumped 5.5 per cent.

Next month, the mining companies and Chinese steel-makers are expected to begin contract talks on the new fixed price for iron-ore.

Analysts forecast the iron-ore prices agreed between the two parties could be as high as $US66.40 a tonne. The price for 2007 was $US51.47 a tonne.

Citigroup research said the price escalation will provide record profits for mining groups with Brazilian giant Companhia Vale de Rio Doce expected to double earnings from iron ore by 2009.

Rising demand for cars, buildings and railroads is expected to boost China's iron-ore import demand by up to 15 per cent next year.

Last year, China acquired more than 50 per cent of the world's traded iron-ore.

The leading trio of BHP, Rio and CVRD supply about 75 per cent of global iron-ore exports.

Goldman Sachs JBWere commodities analyst Paul Gray said iron-ore prices will continue to rise until 2010 as demand outstrips supply.

In anticipation of higher prices and strengthened iron-ore demand, BHP is planning to expand its rail links with its mines in the Pilbara region of Western Australia.

BHP has flagged plans to increase its annual iron ore output in Western Australia three-fold to 300 million tonnes by 2015 to satisfy demand from China.

BHP is believed to be exploring the duplication of its 426 km railway line from Port Hedland to Newman as part of the expansion, so that trains could run on a continuous loop.

The miner's iron ore division has been described as the "jewel in the crown" contributing over $3 billion in earnings.

BHP and Rio are the two largest exporters of iron ore in the Pilbara and have been progressively ramping up and expanding their operations to meet surging demand from China.

Earlier this year Rio approved an almost $1 billion port expansion at Cape Lambert in Western Australia to increase the export capacity from 55 to 80 million tonnes.

Yesterday, BHP shares closed 36c higher at $43.52, while Rio gained $1.45 to $107.45.

The increased speculation that iron-ore prices will go higher also pushed Fortescue Metals share price to a record high of $50.

Fortescue has yet to ship any iron-ore, but from May it plans to start shipping ore to steel-makers in China with an initial targeted output of 45 million tonnes.

Fortescue founder Andrew Forrest plans to increase output to 110 million tonnes.

- with agencies