REFILE-UPDATE 1-Iron ore prices to rise 10-15 pct this yr-group

(Corrects Reuters Instrument Code for Vale in sixth paragraph)

* Chinese iron ore supplies to decline due to poor grades

* China, India to spur further iron ore demand
(Adds details)

CAPE TOWN, Feb 1 (BestGrowthStock) – Iron ore benchmark prices are
likely to go up by 10-15 percent this year, while demand will
rise by around 10 percent compared with last year, the Raw
Materials Group said on Monday.

Magnus Ericsson, a partner at the Raw Materials Group, a
consultancy which provides mining data and conducts surveys on
metals, told a mining conference in Cape Town the demand for
iron ore would mainly be driven by China and India following
the recovery of the global economy.

“Growth will be driven by Asia, not only China but India as
well,” he said.

Ericsson said iron ore supplies were likely to decline in
China due to poor grades and this would enable other exporters
to take advantage and export more of the mineral to the Asian
country.

“The average grade of Chinese production has considerably
gone down. High freight rates protected domestic Chinese
producers, that will go away and expose the Chinese to
competition,” Ericsson said.

Ericsson said the production of the mineral would continue
to be dominated by the three big global players, BHP Billiton
(BHP.N: ), Brazilian mining giant Vale (VALE5.SA: ) and Rio Tinto
(RIO.L: ) while the steel industry, particularly automobile
manufacturers would boost demand following stimulus packages
provided by Western governments to the vehicle.

Ericsson said Australia, which took the lead among big iron
ore producers in 2009 would remain the largest producer for the
next few years, especially if a joint venture project between
two of the major producers was agreed.

Ericsson said some iron ore projects in West Africa had
stalled due to political problems giving a major advantage to
Brazilian and South African producers to ramp up output.

Stock Market Money
(Reporting by Shapi Shacinda; Editing by James Jukwey)

REFILE-UPDATE 1-Iron ore prices to rise 10-15 pct this yr-group