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China calls the shots
Persistent demand from China continues to play a major role in resources markets. It has been a factor in oil testing $100 a barrel, annual coal contract prices doubling, gold surging well over $900 an ounce and platinum even breaching $2,100 an ounce.
In one instance, China Metallurgical Group Corporation (MCC), a conglomerate with an annual turnover equivalent to £9 billion, signed a memorandum of understanding to buy the Cape Lambert iron ore project in Australia’s Pilbara region for A$400 million (£180 million). MCC, which already owns 20 per cent of the £2.4 billion Sino Iron project 120 km from Cape Lambert, has already paid a £4.9 million deposit, half of it unrefundable, on Cape Lambert.
Elsewhere, Tullow Oil has made a new oil discovery at the Odum well in Ghana, an offshore well in the Tano Basin, where drilling underground to nearly 3,400 metres has revealed a gross oil column of 60 metres. Tullow chief executive Aidan Heavey says this commercial discovery has ‘opened up a new prospective play in the region’.
Meanwhile, in a still-buoyant gem market, Firestone Diamonds suggests that one of its kimberlite formations at Tsabong in Botswana could hold 1.1 billion tonnes at 20 carats per hundred tonnes.
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