rubbing salt into the wound....

Minews. Since you’ve started on iron ore you might as well keep going, and then hop across to gold.

Oz. Good decision, because there is chatter in the market that China is marshalling its forces to hit back at the curious recent alliance between BHP Billiton and Rio Tinto. Just how that hitting back will unfold remains to be seen but the speculation is that the game will start with CHINA FUNDING A FOURTH RAILWAY SYSTEM and port to link together a number of “orphaned” or isolated ore bodies which have been struggling to gain access to the BHP Billiton and Rio Tinto rail and port systems. In other words, if China can’t buy a big iron ore producer, following its failure with Rio Tinto, then it will assemble its own source of supply, which will but the big boys under considerable pressure.

The takeover of United Minerals (UMC) by BHP Billiton offers a clue as to how seriously the two leading local miners are treating the threat. Until BHP Billiton moved, UMC was close to doing a deal with a Chinese steel mill. Events at Iron Ore Holdings (IOH) look like repeating that pattern, as IOH is said to be close to revealing a fresh resource upgrade, and is possibly talking to three joint venture partners, or a bidder. On the market, IOH added A5 cents last week to close at A$1.30, but did trade up to a 12 month high of A$1.38 on Monday.

Other iron ore moves last week included Gindalbie (GBG), which recovered from a period of heavy selling to close A10 cents higher at A95 cents. Mt Gibson (MGX) was also in strong recovery mode, rising by A13 cents to A$1.42. Elsewhere, Giralia (GIR) added A9 cents to A$1.06, and Atlas (AGO) rose A6 cents to A$1.81. Meanwhile, Fortescue (FMG) excited the investment banks with talk of an additional debt and capital raising designed to enable the company to expand output to a stratospheric 155 million tonnes a year, and more. That was enough to push the stock up by A20 cents to A$4.04. A handful of iron ore stocks went against the trend. FerrAus (FRA) dropped A3 cents to A73 cents, while BC Iron (BCI), which we took a look at last week, slipped A2.5 cents lower to A$1.15.