Ground Breakers: Iron ore grasps at US$100/t and Newcrest advances Paterson farm-in
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Iron ore producers are holding steady this morning, avoiding a post-rally sell-off after iron ore grasped at the significant US$100/t mark overnight.
It came after a day of barnstorming trade in iron ore futures and producers, following signals China was planning to ease its fiscal policy to recover lost economic growth.
That has fuelled suggestions China will unwind steel production curbs in December, with October figures suggesting its ambitious plans to constrain steel output to 2020 levels will be met.
Steel output across the world fell 10.3% in October to 145.7Mt, a fall almost entirely attributable to China, which produced 3.5 year lows of 71.6Mt (down 23.3% on October 2020).
Production was well up in other markets like the US, Brazil, India and Japan, but China’s role in the steel sector is so substantial its trade with Australian iron ore producers effectively sets iron ore prices.
Benchmark 62% fines were trading for US$99.83/t on Tuesday according to Fastmarkets MB.
Fortescue (ASX:FMG), Rio (ASX:RIO), Champion Iron (ASX:CIA), MinRes (ASX:MIN) and BHP (ASX:BHP) will fall well short of the radical gains they posted yesterday – FMG was up almost 10% – but are all comfortably in the green this morning.
Antipa holds the Wilki project buttressing Newcrest’s own interests in Australia’s gold and copper rich north, where it plans to build the new 160,000ozpa Havieron underground mine by 2023.
It is located just 9km from the Newcrest’s Havieron JV with London-listed Greatland Gold and 15km from Telfer, the giant low grade gold and copper deposit mined by Newcrest for decades.
Antipa has farm ins over its ground with Newcrest, Rio, which made the nearby Winu discovery, and IGO (ASX:IGO).
Newcrest has spent $6 million on exploration over the past two years at Wilki to progress to the first stage of its earn-in.
The gold giant has committed to spend $10 million to earn a 51% JV interest by March 2025.
If it continues with the farm-in, Newcrest then has three years to spend $44 million to earn a 75% stake in the project.