RPT-BAY STREET-Steel slump puts crimp in Labrador Trough

Sun Dec 2, 2012 3:28pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Iron ore price slump hurts development in region

* Shares of junior producers active in Trough struggle

* Resource analysts see value in shares of some players

By Julie Gordon

TORONTO, Dec 2 (Reuters) - "Strike while the iron is hot," the old saying goes, and a legion of iron ore miners setting up in Canada's remote Labrador Trough want to do just that. But, for now, they have to wait.

Iron ore, the main component of steel, has turned ice cold in recent months, with the benchmark price plunging to $86.70 a tonne in September from $149.40 in April. It has since recovered to about $116 a tonne.

The downward spiral has jeopardized the viability of the sub-Arctic region's vast iron ore deposits just as the first new mines in decades were opening. Some projects are being put on hold.

As a consequence, shares of junior miners such as Alderon Iron Ore Corp, Champion Iron Mines Ltd and Century Iron Mines Corp, have tumbled as projects that looked rich at $150 a tonne suddenly lost their luster.   Continued...