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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (34754)	3/26/2009 10:18:39 PM
From: LoneClone	Read Replies (1) \| Respond to of 193999

Rio hopes long talks will help improve ore prices 27th March 2009, 7:45 WST thewest.com.au Rio Tinto said yesterday it was hoping for this year’s iron ore price negotiations to drag on in an attempt to strike a settlement when global market conditions were more favourable. Addressing a mining conference in Singapore yesterday, chief financial officer Guy Elliott said Rio was in no rush to sign off on the annual benchmark talks, given that market conditions for iron ore were expected to improve towards the end of this year. The global steel sector’s weakness has had a devastating impact on the iron ore industry, forcing thousands of job cuts and the shelving of billions of dollars worth of new projects. Rio’s $400 million HIsmelt pig iron plant in Kwinana yesterday became the latest victim of the downturn, with the miner saying it would keep the loss-making plant shut for another year. The admission confirms a report in WestBusiness last week flagging HIsmelt’s uncertain future following a $277 million write-down by Rio of the pig iron plant’s book value. “We do see perhaps from our point of view some benefit in not settling (iron ore prices) immediately,” Mr Elliott said yesterday. “We would like to see some benefits from the upturn that we anticipate in the second half.” The iron ore benchmark price comes into effect at the start of next month, coinciding with the beginning of Japan’s fiscal year. It is not uncommon for talks between miners Vale, Rio and BHP Billiton and steel mill customers to extend beyond April. Rio and BHP last year did not settle on a Pilbara benchmark with customers until the end of June. Rio hopes an improvement in demand for iron ore, driven by the long-awaited impact of the Chinese Government’s massive economic stimulus packages, will also enhance its position at a bargaining table dominated by Chinese mills. The iron ore industry expects Chinese iron ore demand to pick up again towards the end of this year. The sudden slump in global iron ore demand, which began in the third quarter last year, has had a devastating effect on spot prices and given steel mills the upper hand in demanding a substantial cut to 2008’s record benchmark price. Analysts are tipping a fall in benchmark prices this year of 20 to 40 per cent. PETER KLINGER