The latest issue of the Australian Financial Review published an article saying the international market iron ore prices fell sharply brought great pressure to the world's top three iron ore producers and suppliers, including Rio Tinto and BHP Billiton, including Australia, a number of iron ore producers are considering the adjustment or suspension of the planned investment expansion plans.
The article said, the international spot price of iron ore has grown from last year, when up to 180 U.S. dollars / ton down to less than 90 U.S. dollars / ton, the price fell more than 50%. Iron ore prices fell sharply to Rio Tinto and BHP Billiton, has created a huge problem: the original superior based on the price of iron ore capacity expansion plans will be forced to adjust or terminate. This is a frustrating thing, because some of the projects have been put into production or coming into production, suspend these projects will give the company operating tremendous pressure.
Iron ore prices fell back to Australia's Roy Hill mine project brought death threats, the total investment of up to $ 13 billion iron ore development projects can be profitable if iron ore prices must be above 100 U.S. dollars / ton. Morgan Stanley expects spot iron ore prices may fall to 83 U.S. dollars / ton in the short-term. RoyHill mining projects move has become a thorny problem faced by the operational side.
Iron ore prices fell two reasons, First, China's economic slowdown reduced demand for iron ore in China, the other hand, the increase in production capacity market oversupply. The past five years, the international iron ore prices have been high above, launched several iron ore development projects worldwide.
BHP Billiton (BHP Billiton) performance report released last week shows that net profit fell to $ 17.1 billion as of the end of June the previous financial year, compared with last year plunged 35%. By the sharp drop in profits of BHP Billiton adjusted expansion plans to invest $ 20 billion the ongoing Olympic Dam copper mine project may be affected. BHP Billiton chief executive said the company may have to re-look at the original expansion plans MariusKloppers. He said: "We originally developed the plan is based on the judgment on the basis of past market prices, the market has changed, so the plan should make adjustments." He said, in order to guard against potential rapid expansion risk, the company will cut the number of investment spending.
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