US stocks tumble, Sept. 29-Oct. 3

U.S. equities had a rough ride during the trading week. The Dow Jones Industrial Average fell 103 points to 17,009.69, while the S&P 500 Index lost 15 points to end at 1,967.90. The tech-heavy Nasdaq Composite Index tumbled 37 points to 4,475.62. The spot gold price was down US$28.70 per oz. to US$1,190.70.

Russian miner Mechel soared 52%, or US35¢ to US$1.02, on news that it might avoid bankruptcy. The international coal and steel producer could be close to negotiating a deal with its creditors to resolve its debts. The company, controlled by billionaire Igor Zyuzin, owes US$5.1 billion to Russia’s three largest banks, the Wall Street Journal reports. “Government officials have repeatedly said that they see no other solution but to bankrupt the miner or convert the debt into shares,” it cautions. 

Colorado-based rare earths elements (REE) producer Molycorp rose nearly 9% to close at US$1.36 after reporting that the expanded leach system at its Mountain Pass processing plant in California is online. Molycorp expects the system will fix a major production bottleneck at the plant, boost REE production and lower costs. Molycorp, which is North America’s largest REE producer, saw its stock plummet 80% in the past year on the back of depressed REE prices. 

Iron-ore prices have also been weakening, falling 40% this year to below US$80 per ton recently, marking a five-year low.

Alderon Iron Ore was the week’s worst performer, plunging nearly 27% to US59¢. The company, which is developing the US$1.3-billion Kami iron-ore project in the Labrador Trough, said Newfoundland and Labrador Hydro has cleared 20 km to install the third transmission line from Churchill Falls to Labrador West. The transmission line will supply power to Kami once the company secures project financing. Alderon owns 75% of Kami, and China’s largest steelmaker Hebei Iron and Steel Group Co. holds the rest.

 In a separate release, Alderon said director Diana Walters had resigned from the board and that it would seek a replacement.

Iron-ore producer Cliffs Natural Resources dropped 24% to US$8.32 on no major news. The company will hold a conference call for its third-quarter financial results on Oct. 28.

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