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Iron Ore

Wisconsin governor, Chippewas battle over open pit mine plan – by Carol Pogash (U.S.A. Today – September 8, 2013)

http://www.usatoday.com/

ODAHAN, Wis. — While laughing children bob in kayaks along the sandy shores of Lake Superior, their somber parents hunch over picnic tables talking about their wild rice, their water, their fish and their way of life. Members of the Bad River Band of Lake Superior Tribe of Chippewa Indians worry about what is to become of their lake, a life source for their people.

Gov. Scott Walker, his fellow Republicans and the governor’s onetime enemies, labor unions, are championing a $1.5 billion open pit mine planned for the Bad River watershed, six miles from the reservation in the pristine Penokee Hills of northern Wisconsin.

On Aug. 30, six Chippewa tribes of Lake Superior sent President Obama a letter requesting the Department of the Interior prepare litigation to protect the wetlands, fisheries, waters and wildlife from mining. The mining area is honeycombed with 70 miles of rivers and streams that flow north into Lake Superior, which the tribes say would be threatened.

This March, Walker signed a bill streamlining the approval process and easing environmental regulations for the proposed open pit iron ore mine, in which wide swaths of earth are removed to extract minerals. The issue playing out in Wisconsin is being repeated elsewhere.

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BURIED SECRETS: How an Israeli billionaire wrested control of one of Africa’s biggest prizes – by Patrick Radden Keefe (The New Yorker – July 8, 2013)

http://www.newyorker.com/

One of the world’s largest known deposits of untapped iron ore is buried inside a great, forested mountain range in the tiny West African republic of Guinea. In the country’s southeast highlands, far from any city or major roads, the Simandou Mountains stretch for seventy miles, looming over the jungle floor like a giant dinosaur spine. Some of the peaks have nicknames that were bestowed by geologists and miners who have worked in the area; one is Iron Maiden, another Metallica.

Iron ore is the raw material that, once smelted, becomes steel, and the ore at Simandou is unusually rich, meaning that it can be fed into blast furnaces with minimal processing. During the past decade, as glittering mega-cities rose across China, the global price of iron soared, and investors began seeking new sources of ore. The red earth that dusts the lush vegetation around Simandou and marbles the mountain rock is worth a fortune.

Mining iron ore is complicated and requires a huge amount of capital. Simandou lies four hundred miles from the coast, in jungle so impassable that the first drill rigs had to be transported to the mountaintops with helicopters. The site has barely been developed—no ore has been excavated. Shipping it to China and other markets will require not only the construction of a mine but the building of a railroad line sturdy enough to support freight cars laden with ore. It will also be necessary to have access to a deepwater port, which Guinea lacks.

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UPDATE 1-Australia ships more iron ore to China as demand stays strong – by Wayne Cole (Reuters U.K. – September 5, 2013)

http://uk.reuters.com/

SYDNEY, Sept 5 (Reuters) – Australian shipments of iron ore to China looked to have stayed strong in August, a month after Australia boasted its second-highest exports ever to the Asian giant and a sign of healthy demand for resources.

Iron ore exports to China from Port Hedland, which handles about a fifth of the global seaborne market for the steel-making raw material, rose 9 percent in August from July.

Ore shipments of 22.3 million tonnes were up a hefty 33 percent on August last year and not far from all-time highs hit in May. Since the figures are released just a few days after the end of the month, they offer a timely leading indicator of demand in China.

Australia is the single largest supplier of the ore to China, ahead of Brazil. Iron ore is Australia’s single biggest export earner, bringing in around A$60 billion ($54.9 billion) in a good year. The strength of shipments increases the chance that Australia will report a trade surplus for August, and also add to economic growth.

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Wisconsin iron ore project accused of ‘sweetheart’ dealmaking – by Dorothy Kosich (Mineweb.com – September 4, 2013)

http://www.mineweb.com/

The fight over the return of Wisconsin iron ore mining is not finished, as opponents try to prove the Gogebic Taconite project will harm water quality in wetlands.

RENO (MINEWEB) – Wisconsin tribes, lawmakers and miners are fighting over an emergency bill introduced in the Wisconsin State Legislature over the long Labor Day weekend and scheduled for hearing Wednesday, which would allow a controversial iron ore project to restrict public access to a parcel of land near the project.

The Gogebic Taconite iron ore company, owned by West Virginia coal magnate, Chris Cline, aims to construct a $1.5 billion iron ore mine in northern Wisconsin after the state legislature enacted permitting reform in March 2013 to bring back iron ore mining to the state. The mine would operate for at least 35 years and generate 700 jobs in an economically hard-hit area of Wisconsin.

However, the battle over the project is far from over as Native Americans have been regularly protesting against it, prompting accusations of “eco-terrorism” by mining officials. In June, protestors were accused of slashing tires, damaging equipment, and knocking over fences on the minesite. Opponents argue the new mine permitting legislation has relaxed environmental regulations that will lead to pollution of the Bad River watershed, which flows north from the proposed mine area into Lake Superior.

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Hope muted but persistent for Labrador Trough iron rush – by Keith Norbury (Canadian Sailings-Transportation & Trade Logistics – August 27, 2013)

http://www.canadiansailings.ca/

Signs abound that enthusiasm for new iron ore mines in the Labrador Trough have tapered off since February 2011 when the spot price was nearly $190 a tonne. Since then, prices have been on a roller coaster, which experienced more downs than ups. They dipped as low as $87 last September, soared back up over $150 in February, and then tumbled back down to below $115 in June.

Coinciding with that volatility, Canadian National Railway suspended a feasibility study on a new $5 billion rail line to serve potential new mines in the Labrador Trough. Mining giant Rio Tinto has put up for sale its 58.7 per cent interest in Iron Ore Company of Canada, one of the Trough’s and Canada’s largest iron ore producers.

Champion Iron Mines Ltd., one of the promising junior players in the Trough, abruptly pulled out of its participation in a new multi-user $220 million multi-user iron-ore port at Pointe-Noire in Sept-Îles, Que. And Cliffs Resources shut down indefinitely its pelletizing plant at Pointe-Noire.

Despite those setbacks, the consensus among financial analysts and economists who follow the trials and tribulations of the iron ore industry, as well as of industry insiders, is that long-term prospects for ramping up iron ore production in the Trough remain solid.

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NEWS RELEASE: Cliffs Natural Resources Inc. Reports on Sustainability Progress

August 27, 2013

For the entire sustainability report, click here: http://www.cliffsnaturalresources.com/EN/Sustainability/Sustainability2012/Documents/Cliffs%202012%20Sustainability%20Report%20-%20Full%20Version.pdf

CLEVELAND, Aug. 27, 2013 /PRNewswire/ — Cliffs Natural Resources Inc. (NYSE: CLF) (Paris: CLF) announced today the release of its 2012 sustainability report, entitled “Embracing our Past, Securing our Future.” The sustainability report is a comprehensive look at Cliffs’ global operations and outlines the Company’s progress in key areas of its sustainability strategy.

(Logo: http://photos.prnewswire.com/prnh/20101104/CLIFFSLOGO )

“This year has been marked by continual change and volatility in the commodities market, which has presented our Company with a number of opportunities and challenges. However, our expectations of personal accountability and business ethics are unwavering,” said David Cartella, vice-president — global environmental affairs, sustainability and counsel. “Going forward, we will continue to build upon a strong foundation of sustainability with the development of a three-year, enterprise-wide strategy. Aligned with business priorities and integrated with operational and functional groups, this strategy aims to maximize our shared value by reinforcing our social license to operate.”

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Ex-Im loan request pits Caterpillar against iron ore miners – by John Myers (Prairie Business – August 26, 2013)

http://www.prairiebizmag.com/

DULUTH, Minn. — It’s not that Minnesota’s congressional delegation doesn’t like Australia, mate. But the idea of a U.S. government bank loaning money to an Australian iron ore mine that will compete with Minnesota taconite?

That’s what they don’t like.

U.S. Sens. Al Franken and Amy Klobuchar and U.S. Rep. Rick Nolan, all Minnesota Democrats, are on record opposing a plan in front of the U.S. Export-Import Bank to invest in equipment for the giant Roy Hill iron mine in Australia’s northwestern Outback.

The Export-Import Bank is considering a request for $650 million in long-term financing to aid the export of $522 million of U.S.-made mining equipment to mine and process ore at Roy Hill. The rest of the money could be going to install the U.S. equipment on site at the mine.

Cleveland-based Cliffs Natural Resources, with four mines in Minnesota and Michigan, has led the charge to stop the loan, saying it threatens U.S. mining jobs and, with new Asian steel produced from Australian ore, eventually threatens U.S. steel industry jobs.

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Iron ore prices moving higher as China steel production rises – by Lawrence Williams (Mineweb.com – August 15, 2013)

http://www.mineweb.com/

After a bit of a dip, iron ore prices are on the rise as Chinese steel production begins to increase again and the world’s top diversified miners will be the likely principal beneficiaries.

LONDON (MINEWEB)  – It should not have escaped anyone who follows the global mining sector’s attention that the world’s three biggest mining companies by a long way, BHP, Rio Tinto and Vale, are also the three biggest miners of high grade iron ore.

There had been much discussion of how these would fare in a Chinese downturn, given that China is by far the world’s largest importer of iron ore and there was comment that iron ore prices would fall dramatically, thus decimating the big three’s revenues and profits – exacerbated perhaps by the fact that they are all growing production with the inevitable additional costs that involves.

What the observers seemed to have failed to take into account is that China, in a recession, is still the equivalent of anyone else in a mega growth phase! Growth falling perhaps from 10% plus per annum to maybe 6 or 7% – figures western economies would give their eye teeth for!

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Iron ore boom vs. Rudd’s doom – by Barry Fitzgerald and Paul Garvey (The Australian – August 16, 2013)

http://www.theaustralian.com.au/business

ON the hustings and in his campaign ads, Kevin Rudd has been calling the mining boom over.

“The truth is in 2013 the China resources boom is over,” the Prime Minister said on July 11. At the leaders debate on Sunday: “The truth is, with the ending of the decade-long mining boom, we face new economic challenges.” At almost any media opportunity, the mantra is repeated. But he must have forgotten to tell the Chinese — the world’s biggest buyer of mineral commodities.

Ever since returning as PM on June 26, the price of iron ore — Australia’s biggest export by a big margin — has not looked back as Chinese steelmakers frantically restock on the expectation that while there is a slowdown in the country’s infrastructure and urbanisation boom, an economic growth rate of more than 7 per cent on an already greatly enlarged economy means it still needs to suck in vast amounts of the steelmaking raw material.

Iron ore has surged by 26 per cent, or $US29.80 a tonne, to $US142.80 a tonne since Mr Rudd returned to the Lodge and began mapping a re-election strategy that in part at least, links the claimed end to the mining boom to Australia’s ballooning budget deficits.

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ArcelorMittal remains committed to Nunavut iron ore mine – by Robert Gibbens (Montreal Gazette – August 12, 2013)

http://www.montrealgazette.com/index.html

MONTREAL — ArcelorMittal, the world’s largest steelmaker, said Monday it is fully committed to developing a $4 billion open-pit mine with an annual capacity of 18-20 million tonnes of high-grade iron ore on northern Baffin Island in Nunavut.

Steve Wood, ArcelorMittal’s vice-president, Iron Ore Americas, reaffirmed ArcelorMittal’s future plans for long-term development of the Mary River deposits, after addressing the 23rd World Mining Congress at the Palais des Congrès in Montreal. His comments follow skepticism from some industry sources who questioned whether ArcelorMittal was still committed to such a large capacity, following the collapse in global iron ore prices last year, along with a severe slowdown in steel demand.

ArcelorMittal’s commitment to the Baffin Island development comes at a time when executives like Rio Tinto Alcan CEO Jacynthe Côté are talking about the increased risks facing the mining industry, which is struggling with the vagaries of the economic cycle, rising operating, compliance and social costs, and locations that are more remote and challenging.

The blow to iron ore prices last year led ArcelorMittal to reduce its interest in Baffinland Iron Mines Inc. — owner of the almost inexhaustible Mary River deposits — from 75 per cent to 50 per cent.

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Vale Says China Proving Pessimists Wrong on Steel Output – by Juan Pablo Spinetto (Bloomberg News – August 8, 2013)

http://www.bloomberg.com/

Vale SA (VALE), the biggest iron-ore producer, forecast a 10 percent increase in steel output this year in China, the world’s largest steelmaker. China probably will produce 780 million metric tons of steel this year compared with 683 million tons two years ago, underpinning a favorable view on the world’s largest emerging market, Chief Executive Officer Murilo Ferreira said today.

“China has once more proved the pessimists wrong,” Ferreira said during a conference call to discuss quarterly earnings. “Our view related to China continues positive.”

The shares of Vale and major rivals BHP Billiton Plc and Rio Tinto Plc (RIO) rallied today after Chinese imports climbed to the highest in 14 months and an iron-ore index reached a three-month high. The Rio de Janeiro-based company’s shares are down 27 percent this year after a slowdown in commodities demand and rising costs crimped miners’ earnings.

After tumbling 15 percent in the second quarter, iron-ore prices entered a bull market on July 26 after China replenished inventories and boosted steel output. In a presentation on its website today, Vale said a sharp drop in steel inventories in recent months opens the door to greater consumption growth.

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UPDATE 2-Vale profit dives on FX charge; cost-cutting continues – by Jeb Blount (Reuters U.S. – August 7, 2013)

 http://www.reuters.com/

RIO DE JANEIRO, Aug 7 (Reuters) – Brazilian miner Vale SA said on Wednesday its second-quarter profit plunged after the company recorded a surprise $2.78 billion in foreign exchange losses on currency derivatives and debt, one of its worst bottom-line results in a decade.

In the three months ending June 30, net income fell 84 percent to $424 million, compared with a profit of $2.6 billion in the year-ago quarter, Vale said in a statement. The result was below market expectations. The average estimate of 18 analysts surveyed by Reuters was for profit to fall 7.63 percent to $2.46 billion.

Vale said the losses resulted from extraordinary, one-time, non-cash, financial charges that do not reflect its improved operational results. The Rio de Janeiro-based company is the world’s largest iron ore producer, No. 2 nickel miner, and a major producer of copper and fertilizers.

While a stronger dollar led to financial losses and lower profit, it also helped Chief Executive Murilo Ferreira to cut $736 million from the cost of salaries, research, equipment, construction and other goods and services.

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Three bidders out as Rio faces lackluster Canadian sale: sources – by Anjuli Davies and Clara Ferreira-Marques (Reuters U.S. – August 6, 2013)

http://www.reuters.com/

LONDON – (Reuters) – Three big-name bidders for Rio Tinto’s (RIO.L) majority stake in Canada’s largest iron ore producer are now out of the running, sources familiar with the talks said on Tuesday, after offers came in well below the mining group’s targets.

The sources said private equity firm Apollo, which had been working with Canadian pension fund CPPIB, rival Blackstone (BX.N) and commodity trader and miner Glencore (GLEN.L) were no longer in the race after a second round of bids last month. The low offers, at a time when dozens of mining assets are for sale and demand for steelmaking commodities is uncertain, raise questions over the future of a sale that could still take months to tie up – should Rio decide to push ahead.

Rio has a handful of assets on the block as it battles to cut a $19 billion debt burden and meet cost cutting targets. Like other miners seeking to divest unwanted activities, however, it has found buyers unwilling to pay up and in June was forced to scrap the sale of its $1.3 billion diamond business, 15 months after it was first announced.

Rio appointed banks to sell its 59 percent stake in Iron Ore Company of Canada (IOC) earlier this year after deciding to focus its iron ore efforts on assets in Australia’s Pilbara region, where the world’s second-largest iron ore producer has lower costs and higher grades.

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Building facilities, building a work force, building a mine – by Anna Kurth (Hibbing Daily Tribune – July 30, 2013)

http://www.virginiamn.com/

Essar Steel Minnesota’s place in iron industry secure

NASHWAUK — For officials at Essar Steel, mining in Minnesota is all about location. Locating on the Iron Range provides immediate access to the rail lines and utilities necessary to mine and transport their product and employees with the skills they’re seeking.

Building a new plant also provides the advantage of mining next door to the facility, which allows Essar Steel to be in the first-quartile of low-cost producers, said Ken Kinsey, chief of operations. A large portion of mining costs come from mining operations — equipment and employees, he said. Essar Steel will start operations needing less of both.

Other mines first built their primary crusher right on the doorstep of the mine. But during decades of mining, operations have migrated and haul distances have increased. Now Essar will benefit from mining on its crusher’s doorstep.

“We’ve put our plant on the north side of the ore body so it doesn’t encumber any iron ore resources,” Kinsey said, adding that the plant is positioned so mining will start where stripping is lowest.

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Quebec eyes partnership on Nunavik iron mine project – by Jane George (Nunatsiaq News – July 29, 2013)

http://www.nunatsiaqonline.ca/

“We are very pleased to announce that the Ministry of Finance and Economy of the Government of Quebec has confirmed its interest”

Quebec wants in on a huge Nunavik iron mine project. Quebec says it’s ready to invest money as a minority partner in the Hopes Advance iron mine project near the tiny Nunavik community of Aupaluk on Ungava Bay.

Oceanic Iron Ore Corp. said last week that it had received a Letter of Intent from the Quebec’s ministry of Finance and Economy about its interest in becoming a minority partner in the Hopes Advance project, subject to additional future approval of the Quebec government.

The money that Quebec wants to plow into the project comes from the province’s mining and oil capital fund with $750 million for investment in the non-renewable natural resources sector. That fund was announced in November 2012 in Quebec’s 2013-2014 budget speech.

“Oceanic views the Quebec Government’s LOI as a critical step in securing a senior strategic partner and in obtaining future financing for the project’s initial capital expenditures estimated at $ 2.85 billion,” an Oceanic news release said.

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