RIO DE JANEIRO -(Dow Jones)- Recent mergers and acquisitions in the global iron ore industry suggest higher long-term iron ore prices, the chief executive of Brazilian mining and metals company MMX Mineracao e Metalicos SA (MMXM3.BR) said Wednesday.
MMX Chief Executive Roger Downey said during a conference call with investors that the recent C$4.9 billion bid for Consolidated Thompson Iron Mines Ltd. (CLM.T) made by Cleveland-based Cliffs Natural Resources Inc. (CLF) implied a long-term iron ore price of $100 per metric ton.
"That's a huge indicator" of the future direction of iron ore prices," Downey said, underscoring that some estimates of lower iron ore prices were unfounded.
"That's got to shake the earth," Downey said. "That shows the market that $60 a ton is not going to happen."
Downey noted that iron ore prices will need to stay higher in the future because of costs associated with developing some of the world's iron ore deposits. MMX is well positioned because of the low development costs of its mining sites, Downey added.
While MMX is doing due diligence on possible acquisition targets in three or four different areas, the company is focused on developing its own assets and pushing its production to 50 million metric tons.
"The company's story is not just about consolidation. We have a fantastic array of projects and we're going full speed ahead with those projects," Downey said.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085;
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