resources demand, page-6

Atlas head Ken Brinsden told The Australian yesterday that the volatility in the iron ore price -- it has traded as low as $US80 a tonne last September and as high as $US152 a tonne this February -- was due to the switch from annual benchmark contract pricing to index/spot pricing.

"It affords an opportunity for volatility to unfold in a way that it hasn't historically in iron ore markets, so we are getting used to that and positioning our business so we can deal with the volatility."

Mr Brinsden said that the price was unlikely to remain at lower levels for long because the fundamentals of the supply-demand equation pointed to strong demand.

"Our view is elevated pricing will prevail," he said.

Atlas for one is confident of pushing ahead with its growth projects.

The Perth-based miner updated the market on its operations yesterday, saying its board would decide next month whether to push the button on its Mt Webber operation, which has received the final state and federal government approvals.

"We take the view that our projects in general will be competitive in a global sense," Mr Brinsden said.

"We're not wildly optimistic about the price, but we think these projects will be competitive."

Pilbara neighbour Brockman Mining also sent a signal to the market yesterday that China was still keen on Australian iron ore.

It signed a non-binding agreement with Tianjin Port Group to allow the Chinese state-owned giant to explore the potential to invest in Pilbara infrastructure.

http://www.theaustralian.com.au/business/mining-energy/iron-ore-miners-face-18bn-hit/story-e6frg9df-1226654082889