The world’s iron ore powerhouse is preparing to reinvent itself – by David Stringer (Bloomberg News – October 28, 2023)

Vast heaps of crushed brown rock hem the Indian Ocean at Western Australia’s Parker Point port — each a stockpile of 200,000 tons of iron ore, ready to be poured into a procession of bulk carriers bound for Asia’s steel mills.

Rio Tinto Group, the world’s largest iron ore producer, shipped its first cargo of the steelmaking ingredient from this spot in 1966, at the dawn of a boom that minted billionaires and lifted the Australian economy, generating A$1.3 trillion ($820 billion) in earnings in the past two decades alone. Last year, iron ore shipments accounted for about 5% of the country’s gross domestic product.

But now China is cooling, while steel producers are under pressure to clean up a sector that accounts for at least 7% of global greenhouse gas emissions, a change that will require new methods and higher-quality raw materials. Much of the dry, dusty Pilbara region’s gargantuan resource base may no longer make the grade.

Rio, BHP Group Ltd. and Fortescue Metals Group Ltd. produce almost two-thirds of the world’s seaborne iron ore from Western Australia, and margins remain enviable. For the first time in a generation, though, the specter of disruption looms over mining’s most reliable profit generator.

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