Tuesday, October 21, 2014

Mining: End of Iron Age

By Honore Banda in Douala 

The Africa Report - Tuesday, 21 October 2014

Low prices and high supplies are driving iron ore prices down. Analysts say large companies will survive the crunch but many smaller producers and explorers may be faced with tough decisions.
In a red and muddy clearing along Cameroon's densely forested border with the Republic of Congo, a fleet of diggers stands idle.
High above the canopy of trees, dark clouds start to gather. It is an ominous portent for an iron ore project billed as transformative for the country.
Three years ago, the Mbalam mining project, spearheaded by Australian explorer Sundance Resources, was hailed by Cameroon's President Paul Biya as a potential game changer for the Central African country.
Now, as Sundance courts fresh investors to shore up its dwindling cash reserves while iron prices fall, the prospects look bad for the construction of a $5bn railway needed to make the mine economical.

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