Rio Tinto to Strike Simandou Deal with Guinea by 2014; Steel Billet Cash Price Improve

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Rio Tinto is anticipating that it will “agree to a settlement with Guinea on the southern part of the Simandou iron-ore deposit by the end of this year or early in 2014, its chief executive told Reuters on Sunday” (Reuters).

“Rio Tinto was ousted in 2008 from the northern half of Simandou – one of the world’s largest untapped deposits of iron-ore – by the government of former President Lansana Conte, which accused the company of moving too slowly in developing it.”

“The new government of President Alpha Conde settled differences in 2011 and set a date of 2015 for production.”

“However, development of the mine is being slowed while Rio seeks a deal with the government for a legal framework to underpin the multi-billion dollar project.”

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The steel billet cash price closed Friday, November 22 at $230.00 per metric ton, halting its three-day flat run on the LME with a 2.2 percent shift. Friday saw the steel billet 3-month price drift down 2.1 percent to $230.00 per metric ton after three quiet days.

Chinese steel prices were flat for the day. The price of iron ore 58% fines from India were range bound. Chinese HRC held its value last Friday. The price of Chinese coking coal was unchanged.

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The 3-month price of the US HRC futures contract flattened at $650.00 following two-days of declines. The spot price of the US HRC futures contract remained essentially flat at $668.00 per short ton.