Juniors Back In Hunt For Iron Ore Action, Spurred On By Latest Vale Hiccup

Junior explorers/developers vacated the WA iron ore space in a hurry back in 2011-12 when the iron ore price began its almighty slide from $US168/t down to $US55/t in 2015.

But a couple of dam tragedies in Brazil and an annual global steelmake that has continued to surprise to the upside resulted in the iron ore price steadily rebuilding to an impressive $US102/t in the September quarter.

Add in the lower exchange rate and iron ore is again a licence to print money for the big three of the WA industry – Rio Tinto, BHP and Fortescue.

Yes, the iron price has fallen away in the opening weeks of the December quarter to around $US85/t. But it is still a magical price for the WA producers (Fortescue on Thursday reported cash costs for September quarter of $US12.95/t).

All that is why the junior explorers/developers are back in the hunt for a slice of the action. Two names that have popped up recently are Fenix Resources (FEX) and TAO Commodities (TAO), with TAO currently in a trading halt.

But ah ha, have they left their run too late given the iron ore price fall in recent weeks? Not at all.

The fall to $US85/t was widely anticipated on China slowdown fears, and as mentioned, it is still a fantastic price.

Plus, the nickel planets look to be lining up for Mincor and its latest find. Read more +

Barry Fitzgerald

About Barry Fitzgerald

Barry Fitzgerald has covered the resources industry for 30 years. His column highlights the issues, opportunities and challenges for small and mid-cap resources stocks - most recently penned his column for The Australian newspaper and before that, The Age.

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