(Updated for closing stock prices and to provide further detail on the escalating fight between a Rio Tinto-BHP Billiton partnership and the Chinese steel industry.)
NEW YORK (
) -- Mining stocks declined broadly Thursday as the dollar spiked against major currencies, hurting commodities prices along with the shares of the companies that pull those commodities out of the ground.
U.S. equities in general fell sharply Thursday as well, with
increasing by a wider-than-expected margin. The U.S. dollar index, meanwhile, gained more than 1% Thursday.
The dollar-denominated market values of raw materials such as copper, silver, gold and aluminum all move inversely to the value of the greenback, generally speaking. Gold futures especially were hit hard Thursday. The February contract, the most actively traded on the Comdex division of the New York Mercantile Exchange, shed $28.80 to settle at $1,107.40.
In mining news,
reportedly struck a deal with a big Indian steel producer to sell 160,000 metric tons of iron ore. India typically doesn't need to import ore for its steel industry, but a government crackdown on illegal, unregulated mining in the country may have reduced domestic supply.
Meanwhile, China's steel industry, the largest consumer of iron ore in the world, stepped up its effort to thwart Rio Tinto and fellow giant
from creating their mining joint venture in Western Australia. Chinese officials called for antitrust regulators around the world to block the Australian link-up.
In a related development,
unveiled plans Wednesday to build massive iron-ore offloading facilities that would cut the expense of shipping to China, a clear attempt by the Brazilian miner to take market share from its rivals Down Under.
All the activity comes as one Chinese official said Thursday that steel companies there will likely not agree to an iron-ore price increase in 2010, despite widely held expecations of as much as a 20% increase.
Among the iron-ore giants, Rio's New York-listed American depositary receipts fell 3% to finish at $202.60; BHP also fell 3% to $72.30, and Vale stumbled by more than 5% to close at $27.47.
Elsewhere, shares of copper miner
declined 4.4% to $75.96, while aluminum bellwether
lost 2.7% to $14.50.
Shares of gold mining companies were under the most pressure Thursday. The leading decliner was Canada's
, whose stock tumbled 10% on double the daily average volume.
The company, which has experienced a
series of snafus
as it ramps up several new mines, issued operating guidance before the opening bell, saying that its production forecast for 2010 remains unchanged at 1 million to 1.1 million ounces of gold. Agnico expects cash costs of $399 an ounce in 2010. It said it will likely spend $76 million on exploration next year. The company also announced a dividend of 18 cents a share.
Agnico-Eagle shares closed Thursday at $53.99, down $6.21, or 10.3%.
As for other gold stocks,
lost 3.8% to $38.39,
fell 5.5% to $37.51,
retreated 6.1% to $47.63, and
dropped 6.5% to $11.34.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.