Australian miners on rusty red alert

With iron ore trading below $70 a tonne, some of Australia’s mining companies are losing money. With the price set to fall further the question is, what to do?

With global commodity prices expected to remain depressed, Australia’s iron ore miners are scrambling to meet cash flow forecasts and stave off a liquidity crisis.

The first task has been to cut costs by renegotiating supplier contracts and to improve productivity along the supply chain.

In this, the industry has been helped by a decline in diesel costs and a drop in shipping prices caused by high-cost Russian producers exiting the market and freeing up capacity.

But looking further ahead the job of eking out savings looks set to become harder, dimming the outlook for company earnings.

Profit forecasts are tied...

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