Giant New Iron Ore Mine May Aid China’s Push to Cool Prices
- BHP’s $3.6 Billion project to produce 80 million tons a year
- South Flank could add short-term to negative market talk
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BHP Group’s start up of production at its $3.6 billion South Flank project in Australia -- combined with existing operations at the site -- will create the world’s biggest iron ore hub. It may also help temporarily cool a hot market.
Iron ore futures are trading below $200 a ton after China’s cabinet called for tougher oversight of commodity markets and protection for consumers from soaring prices. While South Flank was a replacement mine, the announcement of a big mine coming on stream can add short-term to negative market talk, according to Peter O’Connor, mining analyst at Shaw & Partners Ltd.