Mining Kris heading for Sweden – Swedish Dagbladet The downward pressure on prices look set to continue and chances are that even Swedish mining project turned out.
One has to go back to the fall of 2009 to find a lower iron ore prices. The collapse has gained momentum in recent weeks, with a spate of lower global growth forecasts and gloomy signals from China’s economy.
Globally, the mining industry investments basically halved from levels above 100 billion dollars per year in 2011, according to Alexander Tallberg, analyst at DNB Markets.
The same trend can be attributed to the sale of equipment to mines, from companies such as Atlas Copco.
– Investment in the industry is at present rather on how to increase the capacity of existing projects rather than launching a major new project, says Tallberg said.
the closure of mines is also becoming more common, both in Australia and China. In the mining dense Heibei Province of China estimated that 70 percent of smågruvorna already closed this year, reports Reuters.
In Sweden, is ailing Northland Resources, with mine outside Pajala, and Dannemora Mineral, north of Uppsala, at risk.
– I think it will be very tough for them at these price levels. They are in trouble, says Christian Kopfer, an analyst at Nordea.
Loss-making Northland, already in a reconstruction process, is in a deep crisis. Fixed for Dannemora Mineral sees it, if possible, even worse.
– It has been plowed down more money in Northland, and there is strong ownership interests behind. Dannemora, however, at these price levels, the risk of getting shut down in 2015, he says.
Government LKAB, which breaks iron ore in Kiruna and Gällivare, are also affected. But LKAB saved by their size and a significantly lower cost per tonne of ore.
CEO Lars-Eric Aaro has already warned of increased production and a savings program to reduce costs by 7 percent per year. Kopfer think it will go along way.
– Do the volume up, the total cost smeared on more tons. It can take down the unit cost, ie, increase margins, he said to TT.
The same strategy applied by global giants such as Rio Tinto, Vale and BHP Billiton, which according to industry analysts can handle iron ore prices down to $ 50 per tonne, against today’s 78:60 per ton.
Many analysts expect further price falls down to $ 70 per tonne before it stabilizes and investment bank Goldman Sachs has put the average price at about $ 80 per ton 2016- 2017th
