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Iron Ore

Australia’s Chinese dream must go beyond iron ore – by Michael Smith(Australian Financial Review – October 19, 2017)

http://www.afr.com/

Credit Suisse’s top China economist Dong Tao was given a bodyguard to escort him to the airport in Brazil after his 2013 speech predicting the commodities super cycle was over sent the country’s mining stocks down 5 per cent. When he made a similar speech in Australia later that year, no one believed him.

Tao is back in Australia this week with similar bearish comments about Chinese demand for iron ore and coal. This time round, the market would be wise to pay more attention. Tao, one of the first to predict the end of the China-driven commodities super cycle, says Australia’s weakness is that it has relied too long on China’s insatiable appetite for steel and is not planning for the Asian nation’s transition to a consumption-led economy.

“It is obvious Australians can sell beef and wheat to the Chinese but it can do a hell of a lot more if people do their homework properly,” Tao, a managing director for Credit Suisse’s private banking operations in the region, says.

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Western Nunavut to pressure new government on Grays Bay – by Jane George (Nunatsiaq News – October 18, 2017)

http://www.nunatsiaqonline.ca/

CAMBRIDGE BAY—The Kitikmeot Inuit Association wants to make sure the Grays Bay Road and Port project remains a top government priority, because the Oct. 30 territorial election could see western Nunavut left out of the territory’s leadership circle.

That’s because two of the Grays Bay project’s biggest champions, Peter Taptuna and Keith Peterson, are not seeking re-election.

The upcoming election could result in “a cabinet that may have quite different priorities than the ones which we have enjoyed under [outgoing] Premier Peter Taptuna,” KIA President Stanley Anablak said Oct. 16 in his president’s report to the annual general meeting of the Kitikmeot Inuit Association in Cambridge Bay.

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Amazon rainforest deforestation: ‘Almost 10 per cent’ due to development around mines – by Nick Kilvert (Australian Broadcasting Corporation – October 18, 2017)

http://www.abc.net.au/

Almost 10 per cent of clearing in the Brazilian Amazon rainforest is being driven by unregulated development around mine sites, a new study has found. Researchers analysed satellite data from 2005 to 2015, contrasting areas within a 70-kilometre radius of mine sites, with areas not proximal to mines.

In the study published today in Nature Communications, they found that an extra 11,670 square-kilometres of Amazon rainforest had been cleared where mines were within that radius.

“This is an unregulated source of deforestation, we didn’t know it existed and we assumed it was much smaller than what our results have shown,” said lead author Dr Laura Sonter of the University of Vermont’s Gund Institute.

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U.S. SEC charges Rio Tinto, former top executives with fraud – by Jonathan Barrett and Brendan Pierson (Reuters U.S. – October 17, 2017)

http://www.reuters.com/

SYDNEY/NEW YORK (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Tuesday charged mining company Rio Tinto Plc (RIO.L) (RIO.AX) and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars.

The U.K.’s Financial Conduct Authority (FCA) also said on Tuesday it had reached a settlement with Rio Tinto under which the company would pay a fine of £27 million ($35.6 million) to settle claims that it breached accounting rules in connection with the Mozambique assets.

The Mozambican coal business, which relied on barging the product down the Zambezi River to port, was acquired for $3.7 billion in 2011 from Riversdale Mining and sold a few years later for $50 million.

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Rio Tinto’s Scramble for Africa – by David Fickling (Bloomberg News – October 18, 2017)

https://www.bloomberg.com/

It would be easy to suppose that the fraud claim against Rio Tinto Group filed by the U.S. Securities and Exchange Commission is ancient history.

The miner’s Australian shares closed down 0.8 percent on Wednesday, only a slightly bigger loss than arch-rival BHP Billiton Ltd., which slipped 0.5 percent in the absence of a court case.

That would be a mistake, though. Rio Tinto’s scramble for Africa at the peak of the last mining boom may not have been anywhere near as destructive as the one sparked in the 19th century by another ambitious miner, Cecil Rhodes. Still, it carries a stark warning to an industry gearing up for a fresh round of spending as copper bursts through $7,000 a metric ton for the first time since 2014.

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ON THE ARTICLE ON MINING PUBLISHED THIS PAST WEEK IN THE NEW YORK TIMES – by U.S. Sen. Amy Klobuchar (Mesabi Daily News – October 16, 2017)

http://www.virginiamn.com/

My family is from Ely, and my grandpa spent most of his life working 1,500 feet underground in the iron ore mines. My dad and his brother also spent some time working in the mines. The way several people quoted in the article described the miners is just not accurate and I think it is important for people to know that.

Mining is a critical part of the economy in northern Minnesota. There have been and will always be disagreements on mining issues, and people are free to express their opinions. But no one should be making disrespectful comments. If they do that, they haven’t met Dan Hill. And they haven’t met my grandpa. Here are their stories:

I met Dan Hill in December of 2015 when we brought together miners and mining company executives to meet with the President’s Chief of Staff Denis McDonough about steel dumping from China and the negative effect it was having on the Range. In front of a long table of at least 50 people, Dan — a long time Range resident who was then laid off — was one of the last to speak.

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RPT-COLUMN-China’s Sept iron ore aberration boosts smaller exporters – by Clyde Russell (Reuters U.S. – October 17, 2017)

https://www.reuters.com/

LAUNCESTON, Australia, Oct 17 (Reuters) – The detail of China’s record iron ore imports in September is likely to prove more interesting than the headline-grabbing surge above 100 million tonnes for the first time.

Preliminary customs data released on Oct. 13 showed China imported 103 million tonnes of the steel-making ingredient in September, a 16 percent jump on August’s figure and shattering the previous monthly record of 96.6 million from March.

The prevailing market view is that the sharp jump in September is most likely a last hurrah ahead of some slower months as winter restrictions on steel output come into force.

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Iron Ore Rallies as China Imports Bust 100 Million Ton Level – by Jasmine Ng (Bloomberg News – October 13, 2017)

https://www.bloomberg.com/

Iron ore imports by China surged above 100 million metric tons to a record, smashing the previous high set in 2015, as the country’s concerted push to clean up the environment stoked demand for higher-grade material from overseas while hurting local mine supply. Prices rallied.

Purchases of iron ore expanded to 102.8 million tons in September from 93 million tons a year ago, surpassing the previous record of 96.3 million tons in December 2015, according to customs data on Friday.

Over the first nine months, imports climbed 7.1 percent to 817 million tons, putting full-year purchases on course to top 1 billion tons by a comfortable margin.

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COLUMN-Iron ore price slump brings risk of downside overshoot – by Clyde Russell (Reuters U.S. – October 11, 2017)

https://www.reuters.com/

LAUNCESTON, Australia, Oct 12 (Reuters) – With spot Asian iron ore having fallen back below $60 a tonne, the price of the steelmaking ingredient appears to be heading toward a level more in line with supply and demand fundamentals.

However, as usual the risk when a rally reverses as quickly as the current decline in iron ore is that prices overshoot to the downside. The Asian spot price .IO62-CNO=MB fell to $59.65 a tonne on Wednesday, the lowest level in 3-1/2 months and a drop of 25 percent since the recent peak of $79.65 in late August.

Iron ore is now well below the $78.87 it fetched at the end of 2016, and it is proving to be a volatile year, with two strong rallies being followed by sharp reversals.

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China Gobbles Amazon Rainforest Ore to Clean Its Polluted Skies – by R.T. Watson (Bloomberg News – October 11, 2017)

https://www.bloomberg.com/

A bid by China to clean up pollution in its biggest cities and industrial towns is fueling a push to mine resource riches on the other side of the globe in the Amazon rainforest — one of the most environmentally sensitive areas on Earth.

Smog-laden skies across the world’s most-populated country prompted the government to impose curbs on a domestic steel industry that uses coal-fired blast furnaces to melt iron ore. That’s led to increased demand for higher-grade ore from overseas that can produce more steel with fewer emissions, and profit margins on those shipments have surged.

Exports by Brazil, one of the biggest suppliers, are headed for a fourth straight record in 2017. Top producer Vale SA is shifting production from low-grade reserves in the southeast that have been mined for a century to develop more high-grade deposits in the isolated northern regions of the Amazon, where environmentalists fear further damage to the world’s largest rainforest.

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Hunters still oppose winter sealift and railway for Mary River mine near Pond Inlet, Nunavut – by Sara Frizzell (CBC News North – October 11, 2017)

http://www.cbc.ca/news/canada/north/

For several years, Baffinland Iron Mines has been trying to get permission for a railway and an extended shipping season for its Mary River mine — it’s still trying and hunters in Pond Inlet, Nunavut, are still opposed.

The mining company’s most recent proposal to the Nunavut Planning Commission was closed for public comments at the beginning of October and respondents are still wary of both elements of the revised plan.

In this iteration, Baffinland is looking for approval to build an 110-kilometre railway along the existing roadway, which connects the mine site to the Milne Inlet port site. It was also looking to extend the shipping season through to February by icebreaking.

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China to cancel a third of iron ore mining rights in fight against smog – by Muyu Xu and Manolo Serapio Jr (Reuters U.S. – September 27, 2017)

https://www.reuters.com/

QINGDAO, China (Reuters) – China will cancel about a third of its iron ore mining licenses, mostly belonging to small polluting mines as part of Beijing’s efforts to improve air quality, a mining association official said on Wednesday.

Over 1,000 mining rights will be eliminated under China’s campaign against pollution, Lei Pingxi, chief engineer at the Metallurgical Mines’ Association of China, told an industry conference.

“Some small miners who didn’t pay attention to environmental issues simply closed down temporarily to cope with inspections,” said Lei. “However, these small miners will be forced to upgrade their production processes in order to survive, otherwise they will be cleared out.”

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Iron Ore Succumbs to Bear Market and May Extend Slump Into $50s – by Jasmine Ng (Bloomberg News – September 25, 2017)

https://www.bloomberg.com/

Iron ore has slumped back into a bear market after posting the biggest weekly loss in 16 months amid concern that record demand in China may ease off as mills enact winter output cuts just as data from the top user signals that the economy may be cooling.

Losses have probably been driven by “the realization that if, as planned, large amounts of steel capacity are taken offline during the winter months, this will mean lower demand for iron ore,” Caroline Bain, chief commodities economist at Capital Economics Ltd., said by email. “August activity and spending data suggested that the Chinese economy is starting to slow.”

Spot ore with 62 percent content in Qingdao slipped 0.8 percent to $63.06 a dry metric ton on Monday, after retreating 12 percent last week, according to Metal Bulletin Ltd. Prices have lost more than 20 percent since peaking near $80 in August, meeting the common definition of a bear market. Lower-grade 58 percent ore, which trades at a discount, has sunk into the $30s.

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MOVING MOUNTAINS FOR AN IRON RANGE FUTURE – by Aaron Brown (Hibbing Daily Tribune – September 24, 2017)

http://www.hibbingmn.com/

Aaron J. Brown is an author and community college instructor from Northern Minnesota’s Mesabi Iron Range. He writes the blog MinnesotaBrown.com and hosts the Great Northern Radio Show on Northern Community Radio (KAXE.org).

Soon the Hull Rust Mine View in historic North Hibbing will be closed for good, set to reopen next year at a new location to the east. Shortly thereafter Hibbing Taconite will blow to bits the very mountain of taconite on which the viewing stand sits to send the iron ore on its way to become steel.

A quick review of Iron Range history shows that such displacement is hardly new. They call Hibbing, after all, “The Town That Moved,” relocated some ninety years ago to accommodate mining in the same North Hibbing area where Hibbing Taconite will expand its pit.

Similar movements happened this summer as the state relocated Highway 5 near Chisholm for mining.

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Iron Ore Routed in Woeful Week as Questions Stack Up on China – by Jasmine Ng (Bloomberg News – September 22, 2017)

https://www.bloomberg.com/

Iron ore’s rounding off a woeful week on another soft note as persistent concern about demand in China fuses with expectations of rising supply and falling steel futures to hurt prices. A risk-off mood among investors as North Korean tensions simmered compounded the damage.

The benchmark spot price has tumbled 12 percent this week, the worst performance since May 2016. In China, futures on the Dalian Commodity Exchange have slumped into a bear market and capped a fourth week of declines, the longest in five months, while Singapore’s SGX AsiaClear contracts are chalking up a weekly loss of almost 10 percent.

Iron ore is in retreat as investors fret about the impact on steel production in China of environmental checks even before winter curbs kick in, which may further hurt demand. This year, steel output has been running at a record pace in the top supplier, aiding iron ore.

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