Imported iron ore prices stayed unchanged in the week ending on July 9 from the previous week, as steel factories and traders lacked impetus for purchases amid a sluggish steel market, according to the Xinhua-China Iron Ore Price Index released Tuesday.

The price index for 63.5-percent-purity iron ore imports stayed at 139 points, while the price index for 58-percent-purity iron ore imports also remained unchanged at 118 points, according to the index, which is compiled by Xinhua News Agency to track iron ore inventories and imports on Chinese spot markets.

However, stockpiles of imported iron ore at 25 of China's major sea ports rose to 97.91 million metric tons, up 450,000 tons from a week earlier.

The nation's steel prices have taken a dive since the start of the year, which has weighed negatively on demand for iron ore imports.

The country's economic output expanded 8.1 percent in the first quarter of the year, marking the slowest growth in almost three years. Statistical authorities are scheduled to update economic growth data for the second quarter on Friday, with analysts expecting a growth rate of 7.5 percent.

China customs said Tuesday that exports rose 11.3 percent year-on-year to $180.21 billion in June, slowing from 15.3 percent in May. Imports increased 6.3 percent to $148.48 billion, also down from the 12.7-percent growth registered a month earlier.

Loan financing for Gina Rinehart's $10 billion Australian iron ore project is being held up by talks on capping construction costs, sources said, threatening to push the project back after delays caused by a legal feud in the mining magnate's family.

The Roy Hill project, racing to come on line in late 2014 to beat a risk of iron prices sliding, is looking to raise between $6 and $7 billion in project financing, with more than half seen coming from export credit agencies in Japan, South Korea and China, four sources with knowledge of the deal said.

Roy Hill and potential lenders are concerned about the risk of costs escalating further, as has happened at other Australian resource projects, driven by a scramble for staff and equipment.

The chances of Roy Hill getting first iron ore production in 2014 would be less than 20 percent, said Michael Evans, an analyst at investment house CLSA.

The main factor is it takes a lot of time and lot of money to build railway lines and ports in a market that has finite capacity of construction resources, he said.

Roy Hill, targeting 55 million tonnes a year of iron ore in the Pilbara region in Western Australia, will make Rinehart's Hancock Prospecting Pty Ltd Australia's fourth-largest iron ore miner, behind Rio Tinto, BHP Billiton and Fortescue Metals Group.

It may also cement Rinehart as the world's richest woman. Forbes in February estimated her to be worth $18 billion, making her the richest woman in Asia. Australia's BRW magazine subsequently named her the richest woman in the world, worth an estimated $29 billion.

Hancock Prospecting is talking to contractors about sharing the risk of cost escalation to avoid the cost-plus deals under which clients bears the full burden of any rise in costs.

The main reason for the delay is the cost blowouts (on other projects), said one of the banking sources, who declined to be identified citing confidentiality agreements.

Costs for Roy Hill have already soared to at least $10 billion, according to sources, from its publicly announced cost of $7 billion. However, with uncertainty over iron ore demand and prices, smaller rival projects have been put on ice, which could help limit further cost pressures.

We're on the other side of a commodities boom and a lot of froth has come out of the sector. That has been good for Roy Hill, the same source added.

Roy Hill declined to comment for this story. However, Roy Hill Chief Executive Barry Fitzgerald said in a recent speech the company aims to secure funding approval before the end of 2012 with financial close in early 2013.

BHP Billiton Ltd. (NYSE:BHP) has taken a step toward securing environmental approval for the expansion of its iron ore mining operations in Australia's remote Pilbara region.

The mining company said Wednesday it has lodged a proposal for a strategic assessment with Western Australia state's Environmental Protection Authority.

If the authority decides to proceed, it would lay out environmental conditions and the company would undertake relevant environmental studies and prepare documents for submission to the EPA.

BHP in an emailed statement said it also would conduct a consultation program to seek feedback from communities and other parties.

BHP has plans to more than double its iron ore production capacity in Western Australia to 350 million metric tons a year by 2020, and in time to raise that to 450 million.

The company, which has operated in the Pilbara for more than 40 years, in its proposal said it is investigating a number of developments, including bringing new ore bodies into operation at existing sites. The operations will be progressively developed over at least 50 years, it said.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service