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A labourer looks on as steel coils are lifted to load onto trucks at a steel market in Haikou, Hainan province May 27, 2013.
A labourer looks on as steel coils are lifted to load onto trucks at a steel market in Haikou, Hainan province May 27, 2013.
(China Daily/Reuters)

FINANCIAL TIMES

Iron ore: To dig or not to dig?

Lex is a premium daily commentary service from the Financial Times. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

Judging by investor reactions to the miners’ production reports last week you would think that no one is losing much sleep over the end of the commodities boom. Yet if Australia’s forecasters are correct, the iron ore price could fall to $90 (U.S.) a tonne within the next five years, from about $125 a tonne today. So, as investors reward miners for recent boosts to production, are they at risk of encouraging short-termism?