Jim Rogers Says U.S. Government `Lying' About Inflation

Jim Rogers Says U.S. Government `Lying' About Inflation

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Iron ore boom to roll on

Iron ore boom to roll on
12th June 2007, 7:15 WST
The good times for Australian iron ore miners are set to keep rolling at least until the end of the decade, as Chinese demand shows no sign of slowing.
According to the latest research by US investment bank Citigroup, iron ore prices are expected to rise at least 20 per cent over the next two years and could rise that amount next year alone.
“Tight market conditions are expected to prevail over the next two years, pointing to a 20 per cent increases in prices, however, there are a number of additional considerations lending further price support in the shorter term,” Citigroup said.
“We have taken the view therefore that producers will front-load the price increase (and) now expect prices to increase 20 per cent in 2008-09 and to be flat the year after.”
Citigroup’s revised forecast follows upgrades by fellow banks UBS and Goldman Sachs pointing to cumulative rises of 10 to15 per cent over the next two years.
Should Citigroup’s predictions prove correct and a sixth consecutive increase is agreed in price talks for next year, prices will have risen more than threefold since they last fell in 2002.
Premium Pilbara lump ore was then fetching around $US23 a tonne, while another 20 per cent increase next year would boost the price to around $US80/tonne.
At the same time, official figures from China have shown that Beijing’s efforts to slow its rampant economy and ease domestic inflation are having minimal effect.
Iron ore imports jumped sharply to just over 100 million tonnes in the March quarter, keeping the full year total on track to rise 20 per cent to a record 400 million tonnes this year.
“I can definitely say it (the price) is going up,” Fortescue Metals Group chief Andrew Forrest said on Friday.
“There is an unstoppable force about the demand from the steel industry and the failure of infrastructure to supply it.”
That imbalance has already sparked a desperate Chinese response to gain greater sway over future negotiations and supplies.
With Beijing’s approval, individual Chinese steel companies have been aggressively investing in new mines around the world for several years.
Last week, four of China’s biggest steelmakers — AnSteel, Baosteel, Shougang Steel and Wuhan Iron & Steel — formally launched a dedicated joint investment vehicle to acquire foreign resources.
The company, Beijing Steel Industry United Mining Resources, would improve Chinese steelmakers’ control over supply, AnSteel said.
AnSteel, which is already a partner in Gindalbie Metals’ planned $1 billion Karara magnetite project east of Geraldton, said control of iron ore supplies had “for too long been in other people’s hands”, in turn creating “market instability”.
“Steelmakers who don’t have their own iron ore resources will not survive,” Wuhan said in a statement.
The new company’s initial venture will be at Preah Vihear in Cambodia.
Aside from Karara, Chinese companies are already backing new WA mines in the Pilbara at Cape Preston, Balmoral and Cape Lambert, and in the Mid-West at Koolanooka, Weld Range and Extension Hill.
JOHN PHACEAS

http://www.thewest.com.au/printfriendly.aspx?ContentID=31132

Forrest racks up profit as Niagara eyes switch

Forrest racks up profit as Niagara eyes switch
2nd June 2007, 12:00 WST

Niagara Mining is pushing ahead with a plan to re-brand itself with the historic name Poseidon Nickel as part of moves that have produced more than $100 million in paper profits for billionaire Andrew Forrest and small fortunes for other diehard supporters.

Subiaco-based Niagara will next month seek shareholder approval for the name change and the appointment of Mr Forrest to its board.

Shareholders will also be asked to back the issue of 115 million options with a conversion price of 40¢ to Mr Forrest.

With Niagara shares having risen more than five-fold since Mr Forrest’s plans to join the company were unveiled last month and the stock closing at $1.37 yesterday, the Fortescue Metals boss is already $112 million in the black on the stock.

The proposed name change to Poseidon, backed by Mr Forrest, harks back to the nickel boom in the early 1970s when the Mt Windarra nickel project and its then owner Poseidon were the market’s hottest news.

Niagara bought the dormant Mt Windarra project four years ago and its chief executive, former stockbroker Chris Daws, began working to revive the project and explore surrounding tenements.

Mr Daws is the son of the company’s chairman Doug Daws and the grandson of legendary former Boulder Shire president Charles Daws.

Niagara gained the support of Windarra enthusiasts including former Eyres Reed stockbroker Jeff Verheggen and Stirling Lions Soccer Club chairman Don Evans. Stirling Lions is closely affiliated with the northern suburbs Macedonian community, members of which have invested heavily in Niagara.

Market sources said Mr Verheggen’s family connections had made around $30 million from backing Mr Daws’ vision for a mining revival at Mt Windarra. Friends and business associates of Mr Evans and Mr Verheggen have enjoyed big profits.

Papers for the July 2 shareholder meeting reveal that West Perth corporate advisory group RM Capital is also about to be richly rewarded for its long-standing support.

Niagara is seeking approval for RM, which is headed by corporate adviser James Richardson and former stockbroker Guy Le Page, to be issued six million Niagara options at a strike price of 40¢.

Mr Daws said the options deal with RM was struck early this year before the Forrest-inspired run in Niagara shares and recognised significant amounts of unpaid work performed by the group.

Mr Forrest’s support and cash flow into the group had allowed it to recruit former senior Jubilee Mines geologist Neil Hutchison to oversee the group’s exploration activities.

Mr Daws said it was time to step down and for Mr Forrest to install a new management group. “I am handing over to Andrew and his team, whoever that might be,” he said. The notice of meeting shows experts from BDO have found the proposed options issue to Mr Forrest to be fair and reasonable despite the potential dilution that could see the billionaire own 41 per cent of Niagara in return for $47 million cash.

“Mr Forrest possesses a wealth of knowledge and experience in resources in Australia,” BDO said.

“In addition, Mr Forrest can bring a number of contacts and relationships that may assist Niagara in achieving its objectives.”

NEALE PRIOR
http://www.thewest.com.au/printfriendly.aspx?ContentID=30378