Price resilient iron ore has driven a $10 billion turnaround in the fortunes of Pilbara's pure-play producers of the steel-making commodity, providing a rare ray of sunshine at the end of a horror year for mining stocks.
Defying predictions it would crash in the second half of this year, the spot price for iron ore imported to China was yesterday $US132.10 a tonne. At that price, the handful of Pilbara miners shipping the commodity are reaping better-than-expected cash flow.
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It has translated into big gains for investors, not least the key drivers of Fortescue Metals Group, BC Iron, Atlas Iron and Mineral Resources.
The gains were biggest at Fortescue, which has enjoyed a 99.5 per cent uptick since June when investors were worried iron ore would follow 2012's lead and fall to below $US100/t. Fortescue shares closed at $5.72 yesterday, compared with the June 25 low of $2.87, for a $17.8 billion market value, up $8.9 billion.
Fortescue chairman Andrew Forrest's one-third stake gained $2.9 billion in value to $5.9 billion. Chief executive Nev Power is counting a $3.6 million increase in the value of his stake, to $7.2 million, while development director Peter Meurs' shares are now worth $148.9 million, a gain of $74.2 million.
BC Iron's $5.12 close yesterday is up 74 per cent on a June low of $2.94 for a $270 million market cap turnaround. Chairman Tony Kiernan's stake is up $1.5 million to $3.6 million.
Atlas Iron had been hard hit as investors pondered its strategy. But since falling to 69Â¢ in June, Atlas has picked up 71 per cent to $1.18, for a $449 million improvement in market value. Chairman David Flanagan's stake is up $1.4 million at $3.4 million.
Mineral Resources' shares rebounded 46 per cent since June to $11.70 yesterday. Managing director Chris Ellison's stake rose by $100 million to $316 million.