Territory locks in iron ore price
Australian resources group, Territory Resources has completed marketing and pricing arrangements for its first shipment of iron ore from the Frances Creek mine in the Northern Territory.Territory has in place a life-of-mine sales and marketing agreement with global trading and logistics leader Noble Group. Via this agreement, Territory has agreed a price of US$75 per tonne FOB Darwin (basis 61.5% Fe) for its first shipment of iron ore, expected in September. Territory Resources Chairman, Michael Kiernan said signing of the first sales contract marked another significant milestone for the company and its shareholders. “We are very pleased with the price negotiated for this first contract, which is reflective of the market conditions and the strong demand for high-quality iron ore,” Mr Kiernan said. “The market outlook for iron ore remains particularly strong and, with our closeness to the Chinese market and our relationship with Noble, Territory is well placed to capitalise on these marketing opportunities,” he said. Within the guidelines of its sales and marketing agreement, Noble will purchase all production from FrancesCreek, using nominated guidelines in accordance with mutually agreed prevailing market conditions. Sales will be completed on a quarterly and annual basis, again depending upon market conditions. The $US75 per tonne price negotiated relates to sales for the quarter ended September 30, 2007. Territory currently has stockpiled more than 25,000 tonnes of iron ore (lump over 63 percent) at the Port of Darwin, and is railing ore to port every day in preparation for the expected first shipment to China in September.