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Iron Ore

Shipwreck Casts Shadow Over Fleet of Vale Iron-Ore Carriers – by R.T. Watson (Bloomberg News – May 30, 2017)

https://www.bloomberg.com/

A second vessel contracted to haul iron ore for Brazilian miner Vale SA was delayed for repairs following the loss of a similar ship that mysteriously sank en route to China leaving 22 people presumed dead.

The Stellar Queen departed Vale’s port terminal in northeastern Brazil on May 7 carrying almost 300,000 metric tons of ore, according to the Rio de Janeiro-based company’s website.

However, the ship then stayed anchored in a nearby bay for nearly three weeks after the commandant discovered cracking on the main deck and decided to delay the voyage until repairs could be made, the Maranhao state port authority said last week by email. The port authority finally authorized the ship’s departure on May 26.

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Why iron ore prices and demand should be separated – by Jasmine Ng (Australian Financial Review – May 30, 2017)

http://www.afr.com/

Iron ore consumption in China will probably be sustained as Asia’s top economy builds out infrastructure, according to Mark Mobius, who highlighted what he sees as a difference between the industry’s relatively stable supply-demand fundamentals and large swings in prices.

“We’ve got to separate those two things,” the executive chairman of Templeton Emerging Markets Group said in an interview in Singapore, without giving a price forecast. “Supply-demand is one thing, price is another thing. Because the price is subject to all kinds of external factors, and the traders who are betting on the price going up or down or so forth,” he said on Monday.

Iron ore prices have been subjected to a wild ride in recent years – plunging in 2015, rebounding last year and sinking again in 2017 – as investors sought to gauge the impact of greater supply and the outlook for steel demand in China.

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BHP and Rio face fresh tax threat in WA – by Tess Ingram and Peter Ker (Australian Financial Review – May 28, 2017)

http://www.afr.com/

Iron ore giants BHP Billiton and Rio Tinto are facing a fresh tax grab in Western Australia just months after seeing off the WA Nationals’ concerted push to slap the miners with a tax hike that would have cost them about $3 billion a year.

West Australian Premier Mark McGowan confirmed on Sunday the new Labor state government would ask BHP and Rio to “buy out” the 25¢ lease rental fee they pay on every tonne of iron ore produced to provide a potentially multibillion-dollar injection to government coffers.

At current production rates BHP and Rio would collectively owe WA about $150 million a year in lease rental fees, and while there was no clarity on the number of years’ fees WA wants paid up front, the bill would rise to $4.5 billion if the two miners paid 30 years’ worth of fees in a lump sum.

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Mining interests, partners seek to polish Iron Range’s image – by Peter Passi (Duluth News Tribune – May 25, 2017)

http://www.duluthnewstribune.com/

Some of the Northland’s most prominent players aim to reboot the Iron Range’s image with a new promotional publication unveiled during a press conference at Glensheen Mansion Thursday morning.

The glossy 16-page magazine is meant to burnish the Range’s reputation, said Mark Phillips, commissioner of the Iron Range Resources & Rehabilitation Board.

Often, Phillips said he encounters “very antiquated visions of the region” that date back to the days of miners working with picks and shovels instead of state-of-the-art technology. He said the notion of the Range as an economically depressed area also seems to persist.

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Australia’s Mining Bust Town Reawakens – by James Thornhill (Bloomberg News – May 23, 2017)

https://www.bloomberg.com/

House-buyers seeking a bargain amid the wreckage of Australia’s mining boom might want to get in quick.

Port Hedland, a shipping hub for the Pilbara iron ore region in Western Australia, saw house prices collapse nearly 70 percent in the past four years as workers lost their jobs and left amid the end of a resources investment boom. But prices there have reached a bottom and are now even rising.

“We’re starting to get multiple offers on properties,” said Peter Dunning, a real estate agent at Ray White Group in Port Hedland, who says local values have risen about A$50,000 ($37,470) in the past six months. “People realized that prices had got so cheap, they probably weren’t going to get any cheaper. So they started buying.” Brighter spots in housing is one of three chunks of evidence adding to a growing sense that Australia’s resource-based economies are improving.

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Miner thinks small to resurrect big Canadian iron ore mine – by Susan Taylor (Reuters U.S. – May 24, 2017)

https://www.reuters.com/

TORONTO – Champion Iron Ltd is thinking small with its plans to bring Quebec’s giant Bloom Lake iron ore mine back to life. Chief Executive Michael O’Keeffe intends to slash costs while cutting millions of tonnes from a planned production expansion. The strategy runs counter to the traditional economy of scale formula, which bumps up production for proportional cost savings.

It may prove a prescient approach as iron ore prices pull back from 30-month highs in February. The recovery sparked signs of life for a handful of hibernating miners in Canada’s metal-rich Labrador Trough, straddling the provinces of Quebec and Newfoundland and Labrador, including Champion, Alderon Iron Ore and Tata Steel Minerals Canada.

Champion is taking a different tack with Bloom Lake than its previous owner and North America’s biggest iron ore producer, Cliffs Natural Resources, beginning with the price tag.

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Steinmetz Said to Skip $1.2 Billion Vale Hearing, Risking Loss – by Jesse Riseborough and R.T. Watson (Bloomberg News – May 19, 2017)

https://www.bloomberg.com/

Billionaire Beny Steinmetz’s mining company may be asked to pay as much as $1.2 billion to former partner Vale SA after choosing not to attend an arbitration hearing in London in a dispute over one of the world’s richest mineral assets, two people with knowledge of the case said.

The decision by Steinmetz’s BSG Resources Ltd. to back out of hearings earlier this year will probably cost him the case, the people said, asking not to be identified as the matter is confidential. BSGR felt it wouldn’t be “treated fairly,” according to a letter sent by its lawyers Mishcon De Reya to Vale’s legal representatives dated Jan. 31 and seen by Bloomberg News.

An unfavorable ruling would be the latest setback for the 61-year-old Steinmetz, who’s facing a string of corruption investigations around the world resulting from his failed investment in the giant Simandou iron ore deposit in Guinea. Yet, Vale would still face years of legal battles to enforce any award from the case.

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United Taconite opens new iron pellet plant on Iron Range – by Dee DePass (Minneapolis Star Tribune – May 17, 2017)

http://www.startribune.com/

The $75 million investment in Forbes, Minn., signals another economic bump for Iron Range.

In another positive sign for Minnesota’s Iron Range, the parent company of United Taconite has started production at its new $75 million Mustang “superflux” pellet plant in Forbes, Minn.

Ohio-based Cliffs Natural Resources Inc. said the project “was flawlessly executed,” on budget and on schedule after nine months of construction. And firing up the plant equipment had no hiccups on its first day.

“Building a new facility on budget, without any lost-time accidents, and in only nine months through the Minnesota winter is no small undertaking,” said Cliffs CEO Lourenco Goncalves.

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New workplan developed to fix flagging Inuit job numbers at iron mine – by Steve Ducharme (Nunatsiaq News – May 17, 2017)

http://www.nunatsiaqonline.ca/

Inuit employment rate at Baffinland’s Mary River mine dwindles to 12 per cent

As the Inuit employment rate continues to fall at the Mary River iron mine, the Qikiqtani Inuit Association and Baffinland Iron Mines Corp. say an annual work plan approved this week promises better resources for training and hiring local workers.

The plan, mentioned in a May 14 QIA media release, addresses employment goals that have never materialized since the partners signed their original Inuit Impact and Benefits Agreement in 2013, which has since funnelled more than $40 million dollars into QIA coffers.

But as the money has rolled in, Inuit employment rates have declined steadily—falling far short of the 25 per cent minimum Inuit employment target promised in 2016. Currently, that number sits at 12 per cent, down from 16.7 per cent reported in the first half of 2016 and 20.3 per cent reported in 2014.

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Exclusive: Chinalco proposes taking entire Guinea Simandou iron ore mine – by Tim Cocks (Reuters U.S. – May 15, 2017)

http://www.reuters.com/

CONAKRY – Chinalco has asked Guinea to let it take over the whole of the troubled Simandou iron ore mine project, sources familiar with the matter say, as Beijing pursues a global strategy to secure key resources for its vast economy for decades to come.

Mired in legal disputes, located in Guinea’s remote interior and being planned at a time of depressed world prices, the mine has nevertheless attracted intense interest from China, the world’s biggest producer and consumer of steel.

The Chinese state-owned miner’s written proposal for Simandou, one of the world’s largest untapped resources of high-grade iron ore used to make steel, seeks more favorable terms than laid out by the poor West African country’s mining code.

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THE GOOD SHIP TACONITE, FLAGSHIP OF BOEING EMPIRE, BUILT ON MESABI RANGE PROFITS – by Aaron Brown (Hibbing Daily Tribune – May 7, 2017)

http://www.hibbingmn.com/

For just shy of $1.3 million you could be the owner of a yacht currently docked near Vancouver, British Colombia.

Made of virgin teak, this century-old wooden pleasure ship has been on the market a couple years. Apparently, today’s oligarch-on-the-go simply doesn’t have the time to maintain such an antique. I can distinctly recall my father’s frustration trying to restore and maintain my great-grandfather’s wooden speedboat. The boat seemed almost allergic to water, which was decidedly unhelpful.

But this craft in the Pacific Northwest is much more than a speedboat. And it’s been well cared for. At 125 feet of Depression-era opulence, this particular ship hosted billionaires and Congressmen, celebrities and the ruling class. It cost $421,000 to build in 1930, nearly $6 million in today’s dollars.

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China iron ore imports ease in April amid cloudy outlook – by Clyde Russell (Reuters U.S. – May 5, 2017)

http://www.reuters.com/

LAUNCESTON, AUSTRALIA – The heat came out of China’s iron ore imports in April, with vessel-tracking and port data suggesting a decline of several million tonnes from the near-record levels recorded in March.

A total of 83.27 million tonnes of the steel-making ingredient was discharged at Chinese ports in April, down 3.7 percent from March’s 86.46 million, according to data compiled by Thomson Reuters Supply Chain and Commodity Forecasts. It’s worth noting that the vessel-tracking and port data typically comes in below the official Chinese customs data, which reported 95.56 million tonnes of iron ore imports in March, the second-highest on record.

Nonetheless, the ship data does point to lower imports in April, most likely in the order of 3 million tonnes. Apart from a weak month in February, most likely related to the Lunar New Year holidays, the vessel-tracking figures show April to be the weakest month for iron ore imports since September last year.

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Aussie iron ore giants remain bullish despite price drop – by Kaori Takahashi (May 2, 2017)

http://asia.nikkei.com/

Big miners lifting output on optimism about long-term demand from China, India

SYDNEY — Major Australian iron ore miners are gearing up to bolster production despite falling prices, expecting demand from China and India to continue growing.

Rio Tinto’s production report for the January-March quarter shows its output in Australia declined 3% on the year to 77.2 million tons, due to bad weather. Shipments remained mostly unchanged at 76.7 million tons.

The Anglo-Australian miner is slated to begin production at the Silvergrass mine in Western Australia in the second half of the year. The company projects its 2017 iron ore shipments at 330 million tons to 340 million tons, up from 327.6 million tons last year, and is looking to lift annual volume to 360 million tons down the line.

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BHP Billiton’s stalker Elliott lands in Australia – by John Kehoe (Australian Financial Review – May 2, 2017)

http://www.afr.com/

Elliott Management executives have jetted to Australia to lobby BHP Billiton shareholders on the activist hedge fund’s campaign for the miner to shake up its business structure and return billions of dollars more in cash to shareholders.

Elliott’s investment director from Hong Kong, James Smith, arrived in Sydney on Monday to begin the charm offensive with Australian owners of the dual-listed miner. He will travel to BHP’s home city of Melbourne later this week to speak with shareholders about the hedge fund’s proposals, a source close to the New York headquartered firm said.

Mr Smith – an Englishman who splits his time between Hong Kong and London – was offering shareholders any clarity being sought on Elliott’s three main proposals for BHP and “listening for feedback”, the person said.

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UPDATE 2-Brazil’s Vale slumps as ore price outlook, profit disappoints – by Guillermo Parra-Bernal and Marta Nogueira (Reuters U.K. – April 27, 2017)

http://uk.reuters.com/

Shares in Vale SA slumped the most in two weeks on Thursday, as executives signaled lackluster trends for iron ore prices this year and investors reacted to a first-quarter profit miss with disappointment.

Preferred shares, world No. 1 iron ore producer Vale’s most widely traded class of stock, shed as much as 4 percent. The decline thwarted a recovery in the stock that had made gains this week on expectations Vale would report a near record quarterly profit.

On a results conference call, company executives said supply and demand of the main ingredient for steel look balanced, helping prices stay at $70 reais per tonne or less. In February, Vale’s head of ferrous minerals Peter Poppinga expected prices hovering around $80 a tonne this year.

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