12th Jan 2015 15:14
LONDON (Alliance News) - Brazilian metals and mining corporation Vale SA has become the lowest cost producer of iron ore after a slump in the oil price reduced shipping costs, edging out London listed BHP Billiton Ltd and Rio Tinto PLC, Bloomberg reports citing research company Sanford C Bernstein Ltd.
Vale is the biggest exporter of steel-making iron ore followed by Rio Tinto and BHP Billiton, which have both traditionally held a cost advantage over Vale due to both companies having operations closer to China, according to Bloomberg.
The three exporters control about 60% of global exports and Vale is now shipping iron ore to China for about USD6 less per tonne, including the cost of mining, than exports from Australia where Rio Tinto and BHP Billiton operate.
"Over the last five years it has cost an average of USD23 a ton to ship iron ore from Brazil to China whilst it has cost only USD9 a ton to ship it from Australia. In a world where freight is free and distance to market not an issue, then Brazil is actually at a significant competitive advantage over Australia," said Paul Gait, an analyst at Bernstein cited by Bloomberg.
http://www.bloomberg.com/news/2015-01-12/vale-s-leapfrogs-rio-bhp-as-cheapest-iron-ore-shipper.html
By Joshua Warner; [email protected]; @JoshAlliance
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