Both Raw and Hambro were bullish on iron ore and nickel, two commodities central to the Australian mining industry.
In iron ore, Hambro said if a benchmark contract was settled next year between iron ore miners and steel mills, a 30-35% rise in prices would not be unreasonable.
He added that these price rises would be needed to offset the rising Australian dollar for Australian producers.
Hambro also said the funds he managed were in favour of the Rio Tinto and BHP Billiton iron ore joint venture.
“As shareholders in both companies, we are very hopeful that it can go forward as it has been planned,” he said.
In nickel, Raw said there was a threat to nickel prices from pig iron from places like Indonesia – but this threat was price sensitive, and only became viable if the nickel price surpassed $US7 per pound.
Other sources of nickel supply had also been suspended, she added.
“When we look at future supply there is a concern these major mines, [like BHP Billiton’s Ravensthorpe], which were contributing a major source of growth over the next five years, where is that growth going to come from?” she said.
MRE Price at posting:
89.5¢ Sentiment: Buy Disclosure: Held
