From todays west australian.There is no reason to believe that...

From todays west australian.
There is no reason to believe that they (Ansteel) will not proceed with our project,” Mr Jones said.

Mt Gibson would not comment beyond a brief statement.

“Customer and iron ore sector analysts indicate a slowdown in demand for iron ore in China due to current economic uncertainty and the tightening of credit facilities, leading to reductions in steel production and the current significant build-up of iron ore stockpiles at Chinese ports,” Mt Gibson said.

Although Mt Gibson said it had no obligation to meet its customers’ requests, given they are locked into long-term contracts, it said it hoped for an “acceptable accommodation”.

Analysts said there could be more bad news if the crisis started to hurt the bigger mills, which underpin demand for bigger iron ore miners.

The latest development comes after a handful of analysts dropped their forecasts for next year’s benchmark prices. Iron ore prices have increased fivefold since 2001 but spot prices have fallen more than 40 per cent from the peak. It is also bad news for the next wave of producers.

North West Iron Ore Alliance chairwoman Megan Anwyl said its members – Atlas Iron, FerrAus, BC Iron and Brockman Resources – continued to forge ahead with plans regardless of the global turmoil.