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Probably doesn't concern ARH as they have more than enough to keep them going...


Junior iron ore market ripe for picking
08 AUG

Iron ore has been a hot topic for some time, but there is a new sense of urgency among the junior developers clambering to establish the next West Australian mine.

As another Diggers and Dealers mining forum closes, iron ore hopefuls are leaving Kalgoorlie with thoughts turning to consolidation.

Where uranium sparked excitement at the last forum it was iron ore which took the limelight this year, with Australia's richest woman Gina Rinehart taking out the Dealer of the Year award for her $US1 billion deal with Rio Tinto last year.

Iron ore has seen spectacular price increases with the 19 per cent gain secured with Asian steel mills this year a sweetener to last year's historic 72.5 per cent increase.

And there is already talk of a further five per cent increase next year.

It has swelled the coffers of the major miners with BHP Billiton and Rio Tinto posting impressive profits last year and the latter already notching up a record half year profit of $US3.796 billion.

Iron ore companies are racing to develop the next iron ore mine, hoping to catch the China-driven boom.

Ian Burston, chairman of Aztec Resources and a director of Cape Lambert, says there are between 10 and 15 small companies currently developing iron ore deposits.

However, he believes in a year or so the number of companies will reduce to around five or six.

"Consolidation is not going to go away - there is a lot of contenders," he said at Diggers.

He knows first hand about industry consolidation with his company the subject of a takeover bid from fellow iron ore hopeful Mount Gibson.

DJ Carmichael executive chairman Craig McGown said with so many companies all vying for capital funding it was inevitable that mergers and takeovers would take place.

"Something like iron ore mining that is very capital intensive ... you just can't have so many companies in the market," he said.

He believes most juniors would already have done their homework on their competitors and were already planning corporate moves.

While the battle for the crown of the small end of the iron ore town is bound to continue, one thing is certain - there are plenty of profits for the taking with China still ramping up its modernisation and economic growth.

Comedian Jean Kitson best wrapped it up at the closing Diggers ceremony - "It's China on the phone - dig another hole".