diggers and drillers research, wdr not mentioned but its great...

diggers and drillers research, wdr not mentioned but its great news for the sector and with exports due to start in May 2012 its a great long term buy at these levels.

Iron ore is all over the headlines at the moment, and with good reason. The spot price is now at $166.2, up 26.3% in just one month. This continues to support the better long term contract prices that are getting locked in.

There has been more grumbling by those getting stung by this big jump in iron ore prices. The China Iron and Steel Association (CISA) have proposed a boycott of BHP (ASX:BHP) and Rio (ASX:RIO) in response to what they see as a monopoly. To be honest, this is a bit like protesting at the weather, and I don't think we need to be too worried. If they did pull this off, it would only benefit our iron ore juniors anyway.

Something else that may favour the juniors over BHP and Rio is The WA premier, Colin Barnett, telling the two giants they need to start paying full royalty payments from July onwards. They have been getting away with mate's rates since the sixties, and the premier now wants them to stump up an extra $600 million a year between them. Less cash for their shareholders should make the juniors relatively more appealing.

Yesterday, China's more influential Iron Ore Trading Association banned its members from importing Iron Ore with less than 60% iron content, reports suggested. China has imported plenty of ore from India in the past, almost half of which is below this cut off point. Indian exports are only 9% of world iron ore trade, compared to Australia which has 38%. Still, this move would only boost Australian exports further.
Both of our iron ore stocks are going well given we only recommended them seven weeks ago. Atlas Iron (ASX:AGO) is up 31% from our entry, and Brockman Resources (ASX:BRM) is up 20%.

Atlas has more to gain from the recent jump in iron ore prices as it is already a producer. It has also announced plans to start a drilling program with Altura Mining (ASX:AJM) for the Mt Webber project.

Brockman is still developing so is less impacted by the iron ore prices for now. If it successfully negotiates a good rail freight deal as expected this year, it will have some great gains as well. On a technical basis it is still in strong uptrend, but is in a consolidation phase at that moment. I hope the next leg up will push through the $4 level, on the back of some news about the rail freight deal.