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Iron Ore

Baffinland railway may be “dead,” Pond Inlet group declares – by Jim Bell (Nunatsiaq News – January 8, 2018)

http://www.nunatsiaqonline.ca/

Committee alleges QIA is in a conflict of interest

The controversial 110-kilometre railway that Baffinland Iron Mines Corp. wants to build between the Mary River iron mine and its port at Milne Inlet “may be dead in its tracks,” says a Pond Inlet hamlet committee.

In a statement released near the end of December, when Nunatsiaq News had shut down for the holiday period, the committee, which represents the Hamlet of Pond Inlet and the Mittimatalik Hunters and Trappers Organization, said they have “mounted a challenge” to Baffinland’s railway proposal.

“The Pond Inlet Hamlet Council, together with hunters and trappers organizations from several communities, have written letters, passed resolutions and submitted technical documents opposing the proposed railway,” the Pond Inlet statement said.

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Australia forecasts 20 percent iron ore price drop in 2018 as China demand eases – by James Regan (Reuters U.S. – January 7, 2018)

https://www.reuters.com/

SYDNEY (Reuters) – Australia on Monday said it expects iron ore prices to average $51.50 a tonne this year, down 20 percent from 2017, because of rising global supply and moderating demand from top importer China as its steel sector shrinks.

The government projection is out of step with some private forecasts, with UBS and Citi calling for iron ore prices to average around $64 a tonne in 2018 – flat on 2017’s $64.30 – with the market proving surprisingly resilient.

Spot iron ore, currently around $75 a tonne, last traded below $52 in June 2017, but Department of Industry, Innovation and Science resource and energy analyst David Thurtell pointed to an expected contraction in China’s steel industry. “We’re still comfortable with where our forecast sits,” he said.

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Coal dwarfs battery metals in mining deals despite war on pollution – by Clara Denina and Barbara Lewis (Reuters U.S. -January 5, 2018)

https://www.reuters.com/

LONDON (Reuters) – Coal and iron ore dominated mining takeovers in 2017, Thomson Reuters data shows, with buyers favoring the heavily polluting devil they know over the uncertainties of a battery-powered future.

While the biggest deal was in Brazil, China was a top player despite planning to reduce domestic coal and steel-making to tackle smog in its cities. Elsewhere, miners haunted by the overpriced mega-purchases they made before the commodities crash of 2015 hesitated on deals involving the metals needed to run electric cars.

Mining deals totaled $96.8 billion, based on 2,109 mostly modestly-sized transactions in the past year, Thomson Reuters Deals Intelligence showed. That marked a 10 percent increase in value from 2016 but fell far short of $150-$200 billion totals in the boom years, after which miners had to write billions of dollars off the value of their assets.

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Future of BHP and Vale’s Samarco joint venture remains uncertain – by James Thomson (Australian Financial Review – January 4, 2018)

http://www.afr.com/

The future of BHP Billiton’s stake in the Samarco iron ore joint venture in Brazil is unlikely to be resolved quickly, as the iron ore giant and its co-owner Vale inch towards a restart of the operation.

Reports out of Brazil on Thursday suggested that Brazilian giant Vale and BHP were holding talks on the future structure of the Samarco venture, which has been shut since a deadly dam failure in November 2015.

A Bloomberg report suggested that one option could see Vale acquire Melbourne-based BHP’s half-share and taking full ownership of Samarco.

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Ethical investors tightening screws on emerging-market debt issuers – by Claire Milhench (Reuters U.S. – December 18, 2017)

https://www.reuters.com/

LONDON (Reuters) – For years, the Brazilian mining conglomerate Vale was a darling of emerging market investors, who were happy to ignore the company’s poor record on environmental and social issues because of the high yields its bonds paid.

But warnings about the company’s policies were horribly vindicated in 2015, when a dam holding back waste at its Samarco mine burst, killing 19 people in Brazil’s worst-ever environmental disaster.

Prices on Vale and Samarco bonds plummeted by about a third after the disaster. Vale, along with mine co-owner BHP Billiton, is facing a multi-billion dollar claim.

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Rio Tinto embarks on automation roll-out at Pilbarra iron-ore operations – by Megan Van Wyngaardt (MiningWeekly.com – December 18, 2017)

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – Mining giant Rio Tinto will expand its fleet of autonomous haul trucks at its iron-ore operations in the Pilbara by more than 50% by 2019, after signing agreements with manufacturers Caterpillar and Komatsu to convert traditional trucks to autonomous vehicles.

A total of 29 Komatsu haul trucks will be retrofitted with autonomous haulage system (AHS) technology starting next year. The project at the Brockman 4 operation is scheduled for completion by mid-2019, allowing the mine to run entirely in AHS mode once fully deployed.

A further 19 Caterpillar haul trucks at the Marandoo mine will also be retrofitted starting mid-2018 for completion by the end of 2019. The retrofit is significant for Rio Tinto as it marks the first time AHS technology has been deployed by the company on Caterpillar haul trucks.

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Exports of iron ore pellets lift St. Lawrence Seaway freight volumes – by Eric Atkins (Globe and Mail – December 15, 2017)

https://www.theglobeandmail.com/

Asian demand for U.S. iron ore is driving up freight volumes on the St. Lawrence Seaway.

Overall cargo tonnage, including mining products and grain, rose by 8.5 per cent to 33 million tonnes on the water route as of the end of November, from the same period a year ago, the Chamber of Marine Commerce said on Thursday.

Shipments of iron ore pellets, which are used to make steel, rose by 34 per cent to 7.4 million tonnes as China secured raw materials to feed its manufacturing facilities. Demand was also aided by higher commodity prices, Canadian demand for domestic ore and U.S. tariffs that have spurred sales to U.S. mills on the lower Great Lakes.

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China’s pollution push is working and that’s big news for our miners – by Matthew Stevens (Australian Financial Review – December 12, 2017)

http://www.afr.com/

After crunching a wealth of big data collected from a globe of imaging satellites, unmanned aerial sensors and land-based monitors, analysts at the Swiss investment banking giant UBS have concluded that China’s pollution controls are working, are likely to persist and might even become more widespread.

Assessing the short- and longer-term market effects on minerals and metals markets of China’s determined efforts to improve air quality over 28 of its dirtiest industrial cities sits a novel new challenge for the whole of the global commodities sector.

That the Chinese government’s move to more strictly enforce measures aimed at reducing increasingly dangerous air pollution will reshape traditional annual demand cycles is widely acknowledged by Australia’s biggest miners. But there is a whole lot less agreed certainty over how the very material manufacturing output cuts might reshape actual shipment and pricing patterns.

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Iron Ore From Paradise Wins No Takers as China Upends Market – by Swansy Afonso (Bloomberg News – December 8, 2017)

https://www.bloomberg.com/

A China-led flight to quality in the global iron ore market is punishing producers of the lower-grade material, with miners in India facing an increasing battle to find buyers for their cargoes as demand dwindles.

In Goa, exporters are struggling to sell even a quarter of what they shipped last year, according to Glenn Kalavampara, secretary at the Goa Mineral Ore Exporters’ Association. “There’s absolutely no market,” he said by phone from Panaji, capital of the western state that’s better known for its sparkling beach resorts. “The preference for higher-grade ore is a major concern.” he said.

While Indian exports account for just a fraction of the global seaborne market of about 1.4 billion tons that’s dominated by Vale SA, Rio Tinto Group and BHP Billiton Ltd., the plight of the low-grade shippers highlights the new dynamic.

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Biggest Iron Ore Miner Threatens to Flood Market If Prices Surge – by R.T. Watson and Joe Deaux (Bloomberg News – December 7, 2017)

https://www.bloomberg.com/

Vale SA has a somber message for anyone betting on iron ore prices returning to the heady days of 2011.

The world’s biggest producer of the steel-making ingredient is prepared to unleash as much as 50 million metric tons of spare capacity to balance the market if prices get too high, Chief Executive Officer Fabio Schvartsman said.

High prices would lure inefficient producers back into the market and risk a repeat of past excesses that led to $1 trillion in value destruction, he said Wednesday in an interview with Bloomberg Television from the New York Stock Exchange, where Vale held its annual investor day.

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Iron ore tops $US72 a tonne, defying naysayers yet again – by Timothy Moore (Australian Financial Review – December 5, 2017)

http://www.afr.com/

Iron ore rallied solidly into the $US70 a tonne range as Chinese steel futures surged, with local mills seen continuing to produce at high rates to take advantage of strong profit margins.

The spot price of iron ore rose $US2.57, or 3.7 per cent, to $US72.68 a tonne on Monday, according to Metal Bulletin – its highest since mid September. The steelmaking raw material – which advanced 2.9 per cent on Friday – has now risen more than 20 per cent from late October. Iron ore continues to defy forecasts that it will reverse into the $US50 range as global supply slowly rises and China’s economy gradually slows.

“We think that the latest gains in the iron ore price are a knee-jerk reaction to soaring steel prices, rather than a reflection of iron ore’s fundamentals,” said Caroline Bain, chief commodities economist at Capital Economics.

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Rio Tinto aims for “intelligent” Australian iron ore mine – by James Regans (Reuters U.S. – December 4, 2017)

https://www.reuters.com/

SYDNEY (Reuters) – Rio Tinto next year will seek board approval to develop an “intelligent” iron ore mine at a cost of $2.2 billion, fully incorporating technologies such as robotics and driverless trains and trucks on a single site, the company’s head of iron ore said on Monday.

A feasibility study was underway to demonstrate the economics behind developing the Koodaideri mine in the Pilbara region of the state of Western Australia, said Chief Executive, Iron Ore Chris Salisbury.

Rio Tinto extracts more than 300 million tonnes of ore annually in Australia, making it the world’s second-biggest iron ore miner after Brazilian giant Vale.

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Iron Ore Enters Bull Market as China’s Curbs Supercharge Steel – by Jake Lloyd-Smith and Ranjeetha Pakiam (Bloomberg News – December 3, 2017)

https://www.bloomberg.com/

Iron ore has rallied back into a bull market. Prices are surging as China’s crackdown on steel output this winter runs down inventories, helping mills’ profitability and stoking demand for high-grade ore even as investors discount signs of ample supply.

Spot ore with 62 percent iron content jumped 3.7 percent to $72.68 a metric ton, the highest since Sept. 14, according to Metal Bulletin Ltd. That’s more than 20 percent up from the low hit in late October, meeting the common bull-market definition. Earlier, on Monday, futures in Asia rallied, with the SGX AsiaClear prices rising 2.9 percent to $71.29 a ton.

Iron ore’s gains — which will aid miners including Rio Tinto Group, BHP Billiton Ltd. and Vale SA — are buttressed by China’s unprecedented push to rein in steel output this winter to cut pollution.

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IRON MINING ASSOCIATION OF MINNESOTA NEWS RELEASE: Iron mining contributed $96 million to region in 2017 (November 21, 2017)

http://www.taconite.org/

More than $96 million from iron mining taxes went back into the communities in 2017, according to the Department of Revenue’s 2017 Mining Tax Guide which was released yesterday.

These tax dollars were distributed in 2017 based on the 2016 production year. The report shows Minnesota’s iron mines produced more than 29 million tons of ore in 2016 – the lowest production since 2011.

“This just goes to show what a huge impact Minnesota’s iron mining industry has on our region,” said Iron Mining Association of Minnesota (IMA) President Kelsey Johnson, noting that global pressures aided in the temporary idling of more than half of the iron mining facilities in Minnesota in 2016. Today, all the pellet producing facilities are running once again and operating at full capacity.

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RPT-COLUMN-For China, it’s currently iron ore quality not quantity – by Clyde Russell (Reuters U.S. – November 28, 2017)

https://www.reuters.com/

LAUNCESTON, Australia, Nov 28 (Australia) – It would seem to defy logic that iron ore prices have continued to rise in recent weeks even as China steps up the idling of steel production as part of efforts to limit air pollution over winter.

While there is a historic correlation between iron ore and steel prices in China, the world’s largest importer of the former and producer of the latter, it would have been reasonable to expect them to have diverged in recent weeks, and in the coming months.

Steel prices should outperform iron ore, given it’s steel output that is being restricted, leading to a tightening of the supply side of the market. However, iron ore suffers from no such supply-side scarcity, rather just the opposite, with abundant cargoes available from major exporters Australia, Brazil and South Africa.

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