ady iron ore reserve larger than fmg

and should benefit also from this latest story....why is the price 12 cents you ask....hmmmm not for long!

Iron ore, coal price hikes to boost commodity index, says RBA
Source: PERTH, Feb 24 AAP
Published: February 24 2005, 5:09PM

Recent increases in iron ore and coal prices that will take effect over coming months are expected to boost the index of commodity prices by 20 per cent, the Reserve Bank of Australia said today.

Strong commodity prices have been one of the factors behind the appreciation of the exchange rate over the past four years, which by itself may have tended to slow the economy, RBA head of economic analysts Tony Richards said.

But, overall, the strength in commodity prices have been highly supportive of the Australian economy, boosting incomes and spending, Mr Richards told the Committee for Economic Development of Australia, he said. advertisement

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"My figuring, which is probably quite conservative, suggests that the price increases in coal and iron ore that will take place over coming months will boost the RBA's index of commodity prices by about 20 per cent and boost our terms of trade by 10 per cent," he said.

Brazilian iron ore giant CVRD and Rio Tinto Ltd have both announced 71.5 per cent increases in prices for the new contract year starting April 1.

BHP Billiton, which together with CVRD and Rio accounts for 77 per cent of the seaborne iron ore trade, is expected to follow suit.

Mr Richards said that 20 years ago there was a lot of pessimism about Australia being an exporter of commodities and an importer of manufactured goods, but the experience of recent years suggests Australia has been well served by its commodities sector.

Economic growth figures for the Australian economy due out next week are likely to show annual growth has slowed further from the very rapid pace of growth seen in the second half of 2003, Mr Richards said.

"This slowing in growth is a little at odds to the general perception that the economy is growing very rapidly," Mr Richards said.

Domestic demand and spending has been substantially stronger than growth in production, and has been met with imports, he said.

But with economic expansion now in its 14th year there is little spare capacity available and commodity exports volumes have remained stagnant despite strong global demand and prices.

By Greg Tubby