Shares of BC Iron Limited (ASX: BCI) and Mount Gibson Iron Limited (ASX: MGX) have been hammered today with the pair trading 8.7% and 7.1% lower, respectively. They have now fallen 93% and 79% over the last 12 months. Both miners have come under enormous pressure over the last 16 months due to the fast falling iron ore price.
Since January 2014, the price has dropped 65%, while it has lost nearly a quarter of its value in the last five weeks alone. The commodities crisis may have claimed its latest scalp this morning with fellow junior miner Atlas Iron Limited (ASX: AGO) entering a voluntary suspension of trading.
Indeed, it's reasonable to assume that investors will be fearing both BC Iron and Mount Gibson Iron could follow the lead set by Atlas Iron in the near future. At its current price of roughly US$47 a tonne, it's possible that even Fortescue Metals Group Limited (ASX: FMG) is operating at a loss and it enjoys far lower operating costs than most of Australia's junior miners.
The suspension of Atlas Iron's shares this morning acts as a firm reminder for investors considering venturing into the sector. A bet on the junior iron ore miners today could prove costly and it is still possible you will lose 100% of your investment. As such, investors would be wise to focus on some of the market's safer opportunities instead.
