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Iron Ore

ArcelorMittal eyes Canadian iron ore stake sale: sources – by Euan Rocha (Montreal Gazette/Reuters – October 19, 2012)

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

Deal could potentially avoid Investment Canada hurdle

TORONTO – ArcelorMittal, the world’s largest steelmaker, is exploring the sale of a minority stake in its Canadian iron ore business, sources familiar with the situation said.

The company has retained RBC Capital Markets and Goldman Sachs to assist in the process, which has been going on for a few months, said one of the sources, adding that a deal is likely to be announced before the end of the year.

ArcelorMittal (NYSE: MT) is one of Canada’s top exporters of iron ore to steel markets around the world and its operations account for about 40 per cent of Canada’s iron ore output. It operates two large open-pit mines in the province of Quebec, where it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping.

ArcelorMittal Mines Canada, which traces its origins back to the Quebec Cartier Mining Co., produces 15 million tonnes of iron ore concentrate and more than 9 million tonnes of iron oxide pellets annually.

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Vale reports production declines across wide band of commodities – by Dorothy Kosich (Mineweb.com – October 18, 2012)

http://www.mineweb.com/mineweb/view/mineweb/en/page102055?

Bloomberg Industries says Vale’s share of the global seaborne iron-ore market has declined from 28% in the first half of 2011 to 26% for the same period of this year.

RENO (MINEWEB) – Vale has reported production declines in iron ore, pellets, manganese, copper, potash and phosphate rock for the first nine months of this year.

While the Brazilian mega-miner’s coal output increased a record 144.4% during the period, pellet output was up 3.8% and nickel production stayed flat.

For the first nine months of this year, Vale reported iron ore production of 234.5 million metric tons, a 2.2% drop over the 240 million metric tons of production reported during the first nine months of 2011.

“At Carajas we have not been able to match last year’s performance,” said Vale. “Issues with environmental permitting led to the continuation of mining in some older pits, which has entailed lower productivity, lower Fe content and higher costs.”
“Current performance is definitely not consistent with the high quality of our assets and corrective measures are underway,” the company said in its 3Q12 production report.

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Vale’s major challenges go beyond iron ore – by Jeb Blount (Mineweb.com – October 12, 2012)

www.mineweb.com

Costs are soaring, new mines are running behind schedule and growth in China, Vale’s largest market, is slowing.

RIO DE JANEIRO (REUTERS) – Roger Agnelli, who was forced out as chief executive of Brazil’s Vale in May 2011, may have been lucky to leave the world’s second-largest mining company when he did.

Since Murilo Ferreira replaced him as CEO, a series of setbacks have raised questions about Vale’s ability to increase sales and profit and maintain its place as the world’s top producer of iron ore, the main ingredient in steel.

Costs are soaring, new mines are behind schedule and growth in China, Vale’s largest market, is slowing. The price of iron ore, responsible for nearly three-quarters of the Rio de Janeiro-based company’s sales, recently sank to three-year lows.

Making matters worse, Brazilian laws and government interference threaten to hobble Vale, the country’s biggest exporter. Vale shipped $42 billion of raw materials in 2011, 16 percent of exports from the world’s sixth-largest economy.

“What the government is doing to Vale won’t kill the proverbial golden goose, but it could make the goose sick,” said Mauricio Canedo, an economist specializing in industrial policy and commodities at the Getulio Vargas Foundation (FGV), a Rio de Janeiro economic research institute. “Vale’s future looks less promising now than it has for some time.”

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Duluth has big plans for Minnesota mining – by John Chadwick (Mineweb.com – October 3, 2012)

www.mineweb.com

According to the miner, truly magnificent orebodies are being revealed in an area that has already played a very important role in the US mining industry.

LONDON (INTERNATIONAL MINING) – Ore riches that built America have much more to offer. Minnesota’s Iron Ranges to the west of Lake Superior – Vermilion, Mesabi and Cuyuna from the northeast of Duluth down to the south-southwest – have been the most important ore deposits in US history, and continue to be so, providing well over 90% of the iron ore the country needs. Just a few of the great historical landmarks include the establishment, in 1901, of the world’s first multi-billion dollar corporation, US Steel.

Before that, in May 1890, Edmund Longyear (founder of one of the companies that was to become, much later, Boart Longyear) brought the diamond drill to the Iron Ranges. This exploration tool was to be a key to unlocking the riches of the region.
William Boeing made profits from the Mesabi Range and just a few other great names with Iron Ranges associations include Henry Bessemer, Frederick Weyerhaeuser, Andrew Carnegie, John D. Rockefeller, Kelsey D. Chase, and J.P. Morgan.

Of the known US mineral resources, Minnesota accounts for 99% of the nickel, 90% of the iron, 88% of the cobalt, 51% of the platinum and 48% of the palladium, 40% of the manganese and 34% of the copper. America’s third largest mining state may be poised to take the lead. In work pioneered by Duluth Metals, its Senior Vice President, Exploration, Dean M. Peterson and his innovative team, truly magnificent orebodies are being revealed in an area that has already played such an important role in the US mining industry.

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In gold, iron ore they trust – by Marilyn Scales (Canadian Mining Journal – October 2, 2012)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Mining companies appear to be having an easier time attracting investors recently – particularly if they have a gold or iron ore project. Both commodities have been hot, hot, hot the past year, and developers are prospering.

Labrador Iron Mines Holdings of Toronto has arranged at $30-million bought deal public equity financing. The company calls itself “Canada’s newest iron ore producer” having begun production at its James direct shipping ore iron mine earlier this year. Now LIM will issue 30 million common share at a price of $1.00 each. The deal is underwritten by Canaccord Genuity that is also entitled to an overallotment of 4.5 million shares. The net proceeds are to used for working capital and general corporate purposes.

Premier Gold Mines of Thunder Bay, ON, has arranged a $58.5 million deal consisting of a bought deal public offering and flow-through shares. The company has a number of active exploration projects in Ontario and Nevada. A syndicate of underwriters led by RBC Capital Markets has agreed to purchase 6.58 million common shares at $6.08 each plus 2.61 million flow-through shares at $7.08 each. The underwriters have been granted an overallotment option of 15%. Premier will use the net proceeds of the flow-through shares on its Canadian projects; the balance could be spent in the United States.

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Iron ore price plummet brings trouble to Labrador Trough – by Peter Koven (National Post – October 1, 2012)

The National Post is Canada’s second largest national paper.

Short of the oil sands, there is no Canadian resource getting more foreign attention than the Labrador Trough.

The red-tinged ground that permeates the Quebec-Labrador border region hints at the massive iron ore riches that lie below, and the construction activity around Schefferville (along with much larger booms in nearby Wabush and Labrador City) points to the huge investments to come.

A small army of mining companies are moving ahead with iron-ore projects that could pour tens of billions of dollars into the region. Since most of these firms are juniors and could never finance these projects on their own, they have secured Asia’s largest steelmakers as backers. Iron-ore giants Rio Tinto Ltd., Cliffs Natural Resources Inc. and ArcelorMittal are also in the midst of production expansions.

The Trough only churns out about 40 million tonnes of iron ore a year right now — a pittance in a global market bigger than one billion tonnes. Both the Asian steelmakers and Canadian investors are counting on those numbers to rise substantially in the years to come.

Which is why they were so stunned at what just happened. With virtually no warning, the iron ore price fell off a cliff in August, plummeting about 30%. It was below US$85 a tonne by early September, compared with almost US$200 a tonne in 2010.

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Rail money offered to Quebec miners – by Ashley Fitzpatrick (St. John’s Telegraph – September 19, 2012)

http://www.thetelegram.com/

Adriana Resources not the only iron ore company backed by Wuhan Iron and Steel

Eager to get their hands on Canadian iron ore, Chinese backers of the Lac Otelnuk project in Northern Quebec — what Adriana Resources highlights as the country’s largest iron ore deposit — are willing to cover the construction of a new rail line to move the resource to processing and shipping facilities south, in Sept-îles.

President and CEO of Adriana Resources, Allen Palmiere, included the news when he spoke about Lac Otelnuk at an investors’ forum at the Sheraton Hotel in St. John’s Tuesday. He said regardless of the solution, transportation infrastructure is needed  to move iron ore from the project across the 850-kilometre span to the coast.

The company is developing plans for a mine at the Lac Otelnuk find, expected to be capable of producing 50 million metric tonnes of iron a year. It hinges on having government approvals, aboriginal agreements, power and — something Palmiere focused on — rail access. “We have some challenges,” Palmiere said. “Mining’s the least of our issues.”

Despite having talked to CN about a rail project, Adriana Resources has not signed a deal with the Canadian railway company.
“We haven’t been in dialogue with CN for many months,” Palmiere said. “The discussions are certainly not closed by any means, but we seem to have hit a bit of a stumbling block.”

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Canada’s last mining frontier about to be opened – by Bill Mann, (MarketWatch.com – September 19, 2012)

http://www.marketwatch.com/

Baffin Island iron mine poses daunting logistical challenges

PORT TOWNSEND, Wash. (MarketWatch) — It’s been called “Ice Train Station Zebra” by some Canadian quipsters. No one has ever built a railway on huge Baffin Island, part of which is north of the bottom half of Greenland. That is, until now. A huge iron mine that will use the railroad was formally greenlit by the government last week after months of hearings, four years of planning, and big proxy fights.

You can almost hear the strains of “I’ve been working on the railroad…and freezing my butt off.” Some of the native people who live up in the Canadian territory of Nunavut and attended the government hearings hunt caribou for a living and said they didn’t know what a railroad might look like.

When the arctic railroad (possible name: Burlington Far Northern?) is completed, it will truly be an iron horse — hauling some of the purest iron ore in the world from the Mary River open-pit mine to a port that also needs to be built, at Steensby Inlet. About 25 million tons a year of ore, to be exact. Waiting for that ore will be ice-breaking freighters — also not yet built — which couldn’t have reached the area until climate change made it accessible.

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Baffin Island mega-mine gets green light from Nunavut agency – by Randy Boswell (Montreal Gazette – September 17, 2012)

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

A Nunavut review agency’s approval on Friday of a massive, $4-billion iron mine on Baffin Island not only green-lights one of the biggest industrial projects ever in the Canadian Arctic, it also offers some belated vindication for Sir Martin Frobisher, the 16th-century English explorer who dreamed that Baffin’s rocks might someday yield unimaginable riches.
 
Though Frobisher’s own quest for gold in the future Nunavut was proven futile by the end of the 1570s, his perilous voyages to what was then the outer limit of the known world set the stage for British — and ultimately Canadian — sovereignty over the vast Arctic archipelago, including Baffin Island and the colossal Mary River ore deposit now set to be mined by Toronto-based Baffinland Iron Mines Corp.
 
The planned mine and town site, located near the island’s northern tip, would see almost 20 million tonnes of high-grade iron ore excavated annually from a huge open-pit operation, transported 150 kilometres south along the world’s northernmost railroad to a new deep-water Arctic port, then shipped to European smelters on a fleet of mammoth, custom-made ice-breaking barges.

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Anglo CEO [Cynthia Carroll] Doubles Down on New Mines Amid Falling Demand – by Jeremy Kahn (Bloomberg Markets Magazine – September 2012)

http://www.bloomberg.com/

Driving northeast from Santiago, the road corkscrews toward the shark’s-grin skyline of the Andes Mountains. In winter, Santiago’s smart set plies this route, heading for virgin-powder days and pisco-sour nights at La Parva ski resort. Most have no inkling that in a high mountain valley just over the ridgeline, excavators the size of houses have sculpted the mountainside into a steeply terraced pit 1,800 feet deep, Bloomberg Markets magazine reports in its September issue.

This is Los Bronces, one of the world’s richest copper mines. Anglo American Plc (AAL), the London-based company that owns Los Bronces, spent $2.8 billion from 2007 to 2011 to double the size of the mine. And Los Bronces is just one of four megaprojects that Anglo Chief Executive Officer Cynthia Carroll has initiated or pushed through construction since she took over in 2007 — each representing a wager in excess of $1 billion on the continued rise of China, India and other emerging markets.

Los Bronces is also at the center of a legal battle between Anglo and Codelco, the Chilean state-owned mining company. The dispute — over whether Anglo can block Codelco from exercising an option to buy half of Anglo’s Chilean subsidiary — has spooked Anglo investors and weighed on the company’s share price, which dropped more than 15 percent from the time the controversy erupted in October to August 8.

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Mining heritage still alive in Upper Peninsula [Michigan] – by Phil Power (Holland Sentinel – August 20, 2012)

http://www.hollandsentinel.com/homepage

Ann Arbor — Michigan’s Upper Peninsula has been a powerfully mining-oriented place ever since early explorers were astonished to discover enormous chunks of pure copper in the Keweenaw Peninsula.

The iron ore deposits uncovered west of Marquette in the 19th century were so rich that unprocessed ore was shipped directly to blast furnaces to be made into iron. Once those deposits were worked out, vast quantities remained of less pure — but plenty rich — iron ore. Ever since, this has been one of the U.P.’s biggest industries, creating jobs extracting, processing and shipping iron ore to steel mills from Cleveland to Gary, Ind.

I’ve just returned from a family vacation at our cabin “up north,” where we toured the Tilden iron mine near Negaunee, owned and operated by Cliffs Natural Resources Co., which readers may remember was named Cleveland-Cliffs until a few years ago.

The scope and scale of the mine flabbergasted us. As we approached, we saw a vast three-story rust-colored building looming that seemed to run on for a mile or so. Hills of waste tailings as high as the biggest ski hill rose up to the south.

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Labrador Trough positioned to feed Canada’s iron-ore exports – by Simon Rees (MiningWeekly.com – August 10, 2012)

www.mineweekly.com

TORONTO (miningweekly.com) – While the world worries about the eurozone debt crisis, China’s economic model and US stagnation, mining operators and developers in the Labrador Trough, an iron-ore belt that extends through Canada’s northern Quebec and Labrador, are confident of weathering the storm and continuing to expand.
 
“Production could grow by a yearly compounded growth rate of 35% over the next five years,” the mines branch of Newfoundland and Labrador’s Department for Natural Resources said in its most recent edition of ‘Minfo’.
 
The bullish outlook is predicated on China’s desire to extend seaborne trade in iron-ore away from Rio Tinto, Vale and BHP Billiton. More significantly, the nature of the ore itself makes it an attractive drawcard to steelmakers, owing to its holding less contaminants when compared with material from Australia or Brazil.
 
“Labrador Trough ore remains attractive because it is one of the cleanest in the world; it holds less contaminants such as alumina and phosphates,” Alderon Iron Ore’s VP for business development, Simon Marcotte, explained.

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CN, miners to study new line for Que.-Labrador iron belt – by The Canadian Press (Globe and Mail – August 11, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Canadian National Railway Co. is taking a step toward building a potentially lucrative new transportation link for iron ore producers at the Quebec-Labrador border by proceeding with a feasibility study.
 
The country’s largest railway said Friday that it is working with several mining companies and the Caisse de dépôt et placement du Québec on a study into the rail line and terminal handling facility, which analysts estimated could cost $5-billion.
 
The mining participants are Labrador Iron Mines Holdings Ltd., Cliffs Natural Resources Inc., a big multinational iron ore producer, as well as Canadian public mining companies New Millennium Iron and Alderon Iron Ore Corp.
 
CN said it will co-ordinate an application to the Canadian Environmental Assessment Agency, clearing the way for discussions with affected parties including First Nations.

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