The S&P-ASX 200 index recovered following earlier losses to hit a three-week high of 4465.6 points after the release of China’s gross domestic product figures for the first half, which showed the country’s economy grew by 11.1% while consumer spending and asset investment also jumped.
However, the rally was fleeting with the S&P-ASX 200 dipping back into negative territory, closing 0.4% lower at 4442.6 points on lingering concerns over the state of the US economy.
On the mining front, BHP Billiton shed A27c to close at $38.13, while Rio Tinto fell 77c to $66.61.
Fortescue Metals Group reported a solid performance across its Pilbara operations during the June quarter 2010, with iron ore shipments up 13% on the previous quarter.
Australia’s third biggest iron ore miner said today that ore shipped through its Herb Elliot port at Port Hedland for the quarter was 11.04 million tonnes compared to 9.8Mt in the previous quarter and 8.1Mt in the June quarter 2009.
Meanwhile, FMG also announced a 160Mt upgrade of the resource at its Solomon project in the Pilbara to 2.86 billion tonnes.
However, FMG told journalists today that final decisions over its Solomon and Western Hub projects remain on hold in light of the proposed Mineral Resource Rent Tax.
“We are still sufficiently concerned as to the uncertainty of the final structure of the proposed tax that we have not yet taken any firm decision on the projects that are on hold,” FMG executive director Russell Scrimshaw told journalists during a teleconference.
FMG has been an outspoken critic of both the MRRT and RSPT, with chief executive Andrew Forrest previously saying “it was a mathematical certainty” that the company would not be able to raise additional debt to expand its Pilbara iron ore operations if the RSPT went ahead.
FMG closed the day 18c lower at $4.20.
In other mining news, OZ Minerals has approved the development of an underground mine at Prominent Hill in South Australia.
The company will kick off developing the underground mine in October, with first ore to be mined in the last quarter of 2011.
Shares in OZ gained 2.5c to close at $1.115.
On the commodity front overnight, copper for three-month delivery on the London Metal Exchange added 0.6% to $US6725 per tonne, zinc shed 0.8% to $1850/t while nickel also dipped 0.8% to $19,400/t.
Spot gold was trading 0.2% higher at $1210.45 an ounce at 4:20pm AEST. Newcrest Mining slipped A25c to $35.02, Lihir Gold shed 4c to $4.32 and AngloGold Ashanti fell 31c to $9.22.
Investor safe-haven demand for gold provides significant price support and will do so for next 3 months, "probably even lifting moderately from current levels," Dow Jones Newswires cited Commonwealth Bank of Australia as saying in a daily note.
However, the bank also noted a fall in the gold price over 2011, as progress toward international economic recovery erodes gold’s safe-haven allure.
