Thanks for the link, it's a good story so I think it's worth posting in full. One comment, Andy Haslam talks about US$110/ton but the quarterely report states US$130/ton, but it's pleasing to see costs of just $40/ton. There won't be much debt left at the end of next month.
Iron miners go ape over price prospect
NIGEL ADLAM
May 17th, 2010
Andy Haslam, boss of Territory Resources. Picture: KATRINA BRIDGEFORD A SMALL Territory mining operation will benefit from the push by The Three Gorillas to double the price of iron ore.
Territory Resources sells ore from its Frances Creek on the spot market.
But three giant producers the Anglo-Australian Rio Tinto and BHP and Brazil's Varle are using their muscle to force up the price.
They want the long-term contract system scrapped and replaced with quarterly agreements.
This would raise the price from last year's benchmark of $US67 a tonne to more than $US130.
Territory Resources wouldn't get the full amount because it suffers a "penalty'' for contaminants and a slightly lower grade than the standard.
But it would still hope to get $US110.
Company managing director Andy Haslam said during a visit to Darwin:
"That would be very welcome.'' Territory Resources has pushed production costs down to just over $40 a tonne.
"That's not bad,'' Mr Haslam said.
The company has a major obstacle when trying to keep down costs Darwin Harbour only being able to handle 75,000 tonne ships. That adds $5 per tonne to production costs.
The ships exporting ore from the Pilbara in Western Australia are 200,000 tonnes.
Iron ore prices hit a low of $US47 a tonne last year, not much more than production costs at Frances Creek.
But they are now over $US100 and rising as the world comes out of the global financial crisis.
"Demand is greater than supply,'' Mr Haslam said. "That's pushing up the prices as much as The Three Gorillas negotiating a better deal.''
Frances Creek, near Pine Creek, exports two million tonnes of ore a year to China.
The mine only has life of two-and-ahalf more years.
Territory Resources is looking for other mining oppotunities in the Territory and elsewhere in Australia.
Mr Haslam refused to discuss them.
TTY Price at posting:
19.5¢ Sentiment: Buy Disclosure: Held
