Mining Australia cited Mr Bob Duffin executive chairman of Western Plains Resources as saying that “Benchmark iron ore prices may have dropped an average of 37% recently; however, they are still at a level that represents the second highest price on record.”

Mr Duffin said that while the reductions seemed large, prices are still 10% higher than spot prices.

He said that “In the last quarter of 2008 China closed 250 million tonnes of annual production; however, since that time they have managed to re-open some 120 million tonnes. Iron imports to China are near record prices and ship charter rates are sky-rocketing which tells me that reports of the difficulties currently facing the iron ore sector are greatly exaggerated.”

Western Plains Resources is a relatively small iron ore pre-producer with a market capitalization of USD 40 million. The company has 2 principle projects, one of which is fully permitted and shovel ready.

Last week Hamersley Iron agreed on a benchmark iron ore price with key Japanese steel mine for the year commencing April 1st 2009 for USD 112c/mtu for lump and USD 97c/mtu for fines. The benchmark price represented a reduction of 44.5% for lumps and 32.9% for fines from last year’s prices.

(Sourced from Miningaustralia.com)