Iron Ore – Page 41 – Republic of Mining

China Iron and Steel paints bearish picture for iron ore producers – by Tess Ingram (Australian Financial Review – March 30, 2017)

March 31, 2017

http://www.afr.com/

The China Iron and Steel Association has painted a challenging picture for Australia’s iron ore producers, arguing Chinese steel demand has entered an “era of reduction” and will decline in 2017.

CISA represents China’s biggest state-owned steel mills and generates forecasts used by Beijing to help formulate its five-year plans. Speaking at an iron ore conference in Perth on Thursday, CISA vice president Li Xinchuang said China’s steel industry had transitioned from a period of expansion to an “era of reduction” which would see the country’s steel demand decline 1.9 per cent in 2017 to 660 million tonnes.

Mr Li, who is also the head of China’s top planning body for its metals industries, the China Metallurgical Industry Planning and Research Institute, has long-clashed with iron ore heavyweights BHP Billiton and Rio Tinto over their forecasts that Chinese steel production will continue to grow.

Ports in China have enough iron ore to build 13,000 Eiffel Towers – by Manolo Serapio Jr (Reuters U.S. – March 31, 2017)

March 31, 2017

http://www.reuters.com/

With enough iron ore to construct Paris’s Eiffel Tower nearly 13,000 times over, China’s ports are bursting with stockpiles of the raw material and some of them are demolishing old buildings to create more storage space, trading sources said.

China’s domestic iron ore production jumped 15.3 percent in January-February as a price rally last year extended into 2017, causing imported ore to pile up at the ports of the world’s top buyer. Stockpiles are at their highest in more than a decade and are affecting prices.

Inventory of imported iron ore at 46 Chinese ports reached 132.45 million tonnes on March 24, SteelHome consultancy said, the highest since it began tracking the data in 2004. A third of the stocks belongs to traders and the rest is owned by China’s steel mills, SteelHome said.

Pink Trucks, Netballers Power Billionaire’s Iron Mega-Mine – by Rebecca Keenan (Bloomberg News – March 30, 2017)

March 30, 2017

https://www.bloombergquint.com/

(Bloomberg) — The woman who became the richest person in Australia by developing some of the nation’s vast iron ore deposits has learned one key lesson from the last commodity bust — hire cheaper workers.

Billionaire Gina Rinehart is expanding her payroll to ramp up production from the Roy Hill Holdings Pty mine in Western Australia’s remote Pilbara outback. Many of her new employees get paid less because they have little or no mining experience, like Courtney Grove, 24, who studied animal health and science at university. Since last month, Grove has been driving a pink mining truck that shuttles 226 metric tons of ore at the $10 billion mine.

Targeting so-called “greenies” who can be taught basic mining skills is part of Roy Hill’s push to keep costs low in an age of global surpluses and to diversify its workforce. The iron ore industry was hit hard by a three-year slump that eroded profit and left some companies stuck paying unskilled workers as much as A$200,000 ($154,000) annually, twice the average salary in Australia. While prices have rebounded over the past year, the rally isn’t expected to last.

Citi bearish on iron ore outlook as China remains a wildcard – by Paul Garvey (The Australian – March 30, 2017)

March 30, 2017

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

China’s opaque domestic iron ore sector remains the major wildcard facing the global iron ore industry, with mine reopenings there likely to increase pressure on the price of the steelmaking ingredient.

The surprisingly strong iron ore price of the past year has started to look increasingly shaky in recent weeks, having fallen by more than 13 per cent over the past month after peaking at just under $US95 a tonne in February.

A rise in iron ore stockpiles held at Chinese ports to an unprecedented high of about 230 million tonnes in recent weeks has only added to the uncertainty.

Vale turns to experienced Brazilian manager in Schvartsman – by Joe Leahy (Financial Times – March 28, 2017)

March 30, 2017

https://www.ft.com/

São Paulo – Fabio Schvartsman, the new chief executive officer of Vale, the world’s largest iron ore mining company, is one of Brazil’s most experienced managers when it comes to running vast operations.

His present company, Klabin, the largest paper and cardboard company in Latin America’s biggest economy, controls 235,000 hectares of eucalyptus and pine plantations and 210,000 of native forest.

But that did not make his appointment to replace Vale veteran Murilo Ferreira, announced late Monday, any less of a surprise to the market. “We must admit that this name comes as a surprise to investors — which had been speculating [on] different names,” said Leonardo Correa, analyst with BTG Pactual.

Rio Tinto boss unfazed by concerns about Chinese economy – by Henry Sanderson and Neil Hume (Financial Times – March 28, 2017)

March 28, 2017

https://www.ft.com/

The head of Rio Tinto, one of the world’s biggest mining companies, said he had no concerns about China’s economy, predicting restructuring of the country’s state-owned enterprises would lead to demand for the iron ore it produces in Australia.

Jean-Sébastien Jacques told the FT Commodities Global Summit in Lausanne that China’s crackdown on polluting steel furnaces would lead to greater demand for higher-quality raw material iron ore, a key ingredient in steelmaking. China’s state council has set out plans to eliminate 100m-150m tonnes of steel capacity as it tries to shift to a more consumption and services-oriented economic model.

Officials are planning a new crackdown on steel production in the key north-eastern city of Tangshan in an attempt to prevent false reporting of mill closures by local governments reluctant to obey shutdown orders, according to an official order seen by the FT this week.

Vale taps veteran executive Schvartsman as new CEO – by Guillermo Parra-Bernal (Reuters U.S. – March 28, 2017)

March 28, 2017

http://www.reuters.com/

SAO PAULO – Vale SA surprised investors with the appointment of Fabio Schvartsman as chief executive officer on Monday, choosing a commodities industry veteran to lead transformation of the world’s No. 1 ore producer into a company with dispersed share ownership.

Schvartsman, who has been the CEO of Klabin SA, Brazil’s largest paper and cardboard producer, for the past six years, had not figured in media reports as a potential replacement for CEO Murilo Ferreira. The departure of Ferreira was announced last month.

In a career spanning four decades, Schvartsman occupied key positions in companies such as fuel distribution giant Ultrapar Participações SA, phone carrier Telemar Participações SA and U.S. oil driller San Antonio International. Vale’s board picked him from a list prepared by executive recruiting firm Spencer Stuart.

India looms large on the iron ore horizon: FMG – by Glenda Korporaal (The Australian – March 27, 2017)

March 27, 2017

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

India could be the next big source of demand for Australian iron ore, according to Fortescue Metals chief executive Nev Power.

“Right now China is our major customer but, through Asia and into India, we are seeing very strong growth rates,” he said in an interview with The Australian on the weekend.

“India is now the fastest growing economy in the world, growing at around 7.6 per cent. “It is still has a long way to go before it catches up to China, but with 1.4 billion people you can see that the demand for infrastructure and commodities is going to increase.

The iron ore price has begun its slow descent back to ‘normal’ – by Tess Ingram and Lisa Murray (Australian Financial Review – March 23, 2017)

March 24, 2017

http://www.afr.com/

The iron ore price will fall but it won’t drop off a cliff. That’s the view of analysts who are predicting a drawn-out decline for the price of Australia’s most important commodity, rather than a “sharp crunch down”.

The spot price of iron ore fell 3 per cent in China on Wednesday to $US84.99 per tonne, taking the fall over the past two days to 7.7 per cent. Moves by Chinese regulators to cut property speculation are weighing on the prices of Chinese construction steel and iron ore prices.

While the price has held up surprisingly well in 2017, beating the expectations of most analysts, it has slid consistently since March 16 and is about $US10 per tonne lower than the peak of $US94.86 per tonne on February 21.

Australia’s Rinehart children cleared to sue billionaire mother – by Sonali Paul(Reuters U.S. – March 22, 2017)

March 23, 2017

http://www.reuters.com/

The children of mining billionaire Gina Rinehart, Australia’s richest person, have been cleared by a court to sue their mother for what they describe as mismanagement of a multi-billion dollar family trust, in a long-running family feud.

Rinehart’s daughter Bianca, who is now trustee of the family trust, said Hancock Prospecting Pty Ltd – the mining company set up by her grandfather, Lang Hancock, and run by her mother – did not pay A$500 million ($380 million) in dividends that she said were due to shareholders, one of which is the family trust.

The trust’s only asset is a 24 percent stake in Hancock Prospecting, which has reaped billions of dollars from iron ore assets in Western Australia.

Iron Ore Takes a Battering as Bear Market Engulfs China Futures – by Ranjeetha Pakiam (Bloomberg News – March 22, 2017)

March 22, 2017

https://www.bloomberg.com/

Iron ore is getting battered. After rounds of warnings that this year’s rally may be overdone, the raw material is in retreat as doubts gather about the strength of demand in China as steel sells off and record port stockpiles put a spotlight on rising supplies.

In China, futures on the Dalian Commodity Exchange sank into a bear market as steel in Shanghai posted the longest run of declines this year, while the SGX AsiaClear contract in Singapore fell for a fourth day. Benchmark spot prices from Metal Bulletin Ltd. extended a loss below $90 a dry metric ton to the lowest since Feb. 9.

“Steel demand in China is clearly robust, but iron ore prices remain very elevated versus fundamentals, and it’s only a matter of time before they normalize to below $60,” Ian Roper, an analyst at Macquarie Group Ltd., said in an email. “We’ve had a negative view on prices for a while but they’ve held up longer than we expected.”

Brazil dam disaster lawsuit against BHP Billiton, Vale, suspended – by Paul Kiernan(The Australian – March 17, 2018)

March 17, 2017

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

A Brazilian judge has suspended a nearly $US50 billion ($A65bn) lawsuit against the mining firms responsible for the 2015 Samarco tailings dam disaster, as negotiations between the companies and authorities moved forward.

The decision came as part of a ruling in which federal judge Mário de Paula Franco Júnior approved a road map toward a final agreement between prosecutors and mining companies BHP Billiton (BHP), Vale, and their joint-venture Samarco Mineração.

Brazil’s government, which brought the lawsuit, was not immediately available for comment but in the past has indicated its main concern was reaching a settlement and safely restarting the mine.

Top Iron Miners’ Cash Juggernaut Set to Survive Price Crash – by David Stringer (Bloomberg News – March 13, 2017)

March 13, 2017

https://www.bloomberg.com/

The world’s biggest iron ore miners will be able to withstand the expected plunge in prices because their race to cut production costs has dramatically lowered the industry’s margin pressure point, allowing them to keep fueling a cash juggernaut that’s revived the mining sector.

More than 90 percent of producers in the global seaborne market can generate profits at a benchmark price of $60 a metric ton, Adrian Doyle, a Sydney-based senior consultant at researcher CRU Group, said by phone. That compares with about 65 percent of suppliers able to avoid losses at the same price point three years ago, he said.

“There have been fantastic cost reductions in a lot of instances,” while producers have also been boosted by lower oil prices, Doyle said. “If we were thinking of a pressure point where we’d start to see a bit of stretching in the industry, previously it would’ve been around $60 a ton, now it’s closer to $50 a ton-to-$45 a ton to stress test everyone but the majors.”

Life in Labrador iron ore scene – by Daniel Gleeson (Mining Journal – March 1, 2017)

March 6, 2017

http://www.mining-journal.com/

The latest bulletin came from Alderon Iron Ore (CN:ADV), which published the results of a preliminary economic assessment on the Rose deposit, part of its 75%-owned Kami project, in western Labrador. This followed close on the heels of Champion Iron (CN:CIA) updating its own Bloom Lake project economics and Rio Tinto’s (LN:RIO) majority-owned Iron Ore Company of Canada announcing plans to push ahead with its C$79 million (US$59 million) Wabush 3 project.

There is an obvious reason all three of these companies have chosen now to come out with their news: the iron ore price. Hovering around a two-and-a-half year high – at just over US$90 per tonne – the 62% Fe price has confounded analyst expectations in the first two months of the year.

This has allowed all three companies to set out business plans at much higher prices than they would have done a year earlier when a tonne of ore was changing hands at a level closer to US$50. For Alderon, this is a real coup, allowing the company to announce what it calls a “reboot of the Kami project”.

China to slash steel, aluminium output in bid to check smog (Australian Financial Review/Reuters – March 2, 2017)

March 2, 2017

http://www.afr.com/

China has ordered steel and aluminium producers in 28 cities to slash output during winter, outlined plans to curb coal use in the capital and required coal transport by rail in the north, as Beijing intensifies its war on smog, a policy document shows.

The 26-page document dated February 17 and seen by Reuters did not include some stringent steps proposed in a draft policy to slash fertiliser output and introduce a full ban on coal being handled at Tianjin, one of the country’s busiest ports.

The government has called on steel producers to halve output in four northern provinces – Hebei, Shanxi, Shandong, Henan – as well as Beijing and Tianjin, during the peak winter heating months around late November to late February. The size of the cuts will depend on the level of regions’ emissions cuts.