Former Portman Ltd chairman George Jones believes a 10 per cent increase in the iron ore price is likely next year with demand for the steel making material still very strong.
Mr Jones said ramp-up plans by established producers were taking time and were not keeping up with increasing demand.
"I think the price rise will be more modest than in previous years, the 71 per cent caught me by surprise but the nearly 20 per cent last year didn't," Mr Jones told a briefing in Perth today.
"CVRD have put up their hand for 40 per cent, that will be ambitious, I think at least 10 per cent is achievable and highly likely."
Mr Jones made the call while spruiking his latest venture, Sundance Resources Ltd, where he has recently been appointed non-executive chairman.
Sundance's key asset is the Mbalam iron ore project in Cameroon which has an inferred resource in excess of 800 million tonnes, including 218 million tonnes grading more than 60 per cent iron.
The project is located about 550 kilometres from the coast in an area with no established infrastructure.
Sundance is planning to complete an $18 million pre-feasibility study on the project by mid-2007 and is aiming to bring the operation online by about 2010.
The company is intending to raise $20 million through a share placement to finance the feasibility work.
A scoping study completed by Australian-based Promet Engineers last year estimated it would cost about $3.29 billion to bring onstream.
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