An iron-mining gambit by Asian investors to break Australian magnates’ hold on the industry has backfired, The Wall Street Journal reported. Companies including China’s Ansteel Mining and Japan’s Mitsubishi (8058.TYO) have halted or scaled back plans to open up a new mining hub in Western Australia for magnetite, a low-grade ore. Magnetite is more costly to produce than hematite, the ore typically mined by Anglo-Australian behemoths BHP Billiton (BHP.NYSE) and Rio Tinto (RIO.NYSE). Worries about a global iron shortfall in 2011 drove Asian investment into Western Australia, but a fall in iron-ore prices to a five year low below RMB509.12 (USD$83) a ton may leave companies like Citic Ltd. (0267.HKG), which poured RMB61.38 billion (USD$10 billion) into one such magnetite project, hoisted by their own petards.
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