22 Oct 2013
The iron ore bubble in Australia
FXstreet.com (Chicago) – Speculators expect more capital expansion from BHP and Rio to invest in iron ore mines in Australia after comments from chief executive Mackenzie from the Billiton group. With three existing mines, Jimblebar, southern to Newman, would be the next location for mineral extraction despite expectations of a declining Chinese growth in the incoming years.
"With iron ore prices where they are, there is very good money to be made and, of the options BHP has to deploy capital for growth across its portfolio, iron ore is one of the better ones” said Neil Boyd0Clark from Arnhem Investment Management.
BHP announced a production guidance by 5 million tonnes to 212 million tones this and next year with Rio expecting similar production. Current levels are $US130 a tonne with expectations for a longer-term to $US70 - $US90 implying the sooner production takes place, the better.
"With iron ore prices where they are, there is very good money to be made and, of the options BHP has to deploy capital for growth across its portfolio, iron ore is one of the better ones” said Neil Boyd0Clark from Arnhem Investment Management.
BHP announced a production guidance by 5 million tonnes to 212 million tones this and next year with Rio expecting similar production. Current levels are $US130 a tonne with expectations for a longer-term to $US70 - $US90 implying the sooner production takes place, the better.