Recent deals imply higher long term iron ore prices - Mr Downey

Brazilian mining and metals company MMX Mineracao e Metalicos SA said that recent mergers and acquisitions in the global iron ore industry suggest higher long term iron ore prices.

Mr Roger Downey CEO of MMX during a conference call with investors said that the recent CAD 4.9 billion bid for Consolidated Thompson Iron Mines Ltd made by Cleveland-based Cliffs Natural Resources Inc. implied a long-term iron ore price of USD 100 per tonne.

Mr Downey said that "That's a huge indicator of the future direction of iron ore prices underscoring that some estimates of lower iron ore prices were unfounded. That's got to shake the earth. That shows the market that USD 60 a tonne is not going to happen."

Mr 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.

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 tonnes.

Mr Downey said that "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.”

(Sourced from Dow Jones Newswires)