WA mining companies are enjoying a six-week surge in the iron ore price, as it reached almost $US60 a tonne this week.
Earlier this month, the iron ore price was at a 10-year low of $US46.70 a tonne.
The increase in iron ore price is good news for local iron ore miners such as BC Iron, Mt Gibson Iron and Fortescue Metals Group.
Fortescue, celebrated its best day of trade in three years on Monday, surging 16 per cent to a two-month high.
It’s now 31 per cent above the post-crisis trough it sunk to on April 13 and can turn a profit at current prices given a break-even cost in the low $US50s.
Meanwhile, the stock of BC Iron has doubled in a week, while Mt Gibson’s recovery has been a more sedate 15 per cent.
Iron ore giants BHP Billiton and Rio Tinto were previously criticised for “flooding the market” and threatening the business sustainability of smaller producers.
This has resulted in numerous cost cuts and job losses statewide, with Atlas Iron most recently having to suspend production at its Pilbara mines.
A rebound of more than 20 per cent might just be enough for creditors to allow Atlas Iron an opportunity to bounce back and stave off receivership.
Furthermore last week, BHP slowed expansion growth shelving an upgrade at its export terminal Port Hedland, which would slow the pace of expansion to 290 million tonnes a year.
Source: Perth news
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