Diversified mining group Kumba Resources on Monday came close to an all-time high on continued speculation about the settlement prices for iron ore, which are currently being negotiated.
At 9.40am, Kumba was quoted at R57,49, up 28 cents or 0,5% from its Friday close. In early trade, Kumba touched R58 a share, close to its all-time high of R59 achieved on March 18 2004.
Brazilian mining group Companhia Vale do Rio Doce (CVRD) is seeking a 90% increase in the contract price at which it sells its iron ore to its Asian steel customers, CVRD spokesperson Fernando Thompson confirmed from Rio de Janeiro on Friday.
For the 2004/05 year, iron-ore contract prices rose by 18,62%, which was the highest increase since 1980, and in the previous marketing year, contract prices rose 9%.
Price increases are effective each year from April 1.
Each year, the key negotiations that set the price for iron ore are those that take place between CVRD, the world’s largest iron-ore miner, BHP Billiton and Rio Tinto, on the one side, and European steel producers such as Arcelor, the global number one steel maker, and Japanese steel makers Nippon Steel Corporation, Sumitomo Metal Industries and JFE Steel group on the other side.
Kumba produces about 30-million tonnes of iron ore a year, with part of the production sold to South African steel maker Ispat Iscor at cost plus 3%.
The group is the world’s fourth-largest deep-sea exporter of iron ore. — I-Net Bridge