Iron Ore – Page 86 – Republic of Mining

Minister promotes N.L. iron ore in China – by Ashley Fitzpatrick (St. John’s Telegram – October 30, 2014)

October 30, 2014

http://www.thetelegram.com/

Lab West waiting as Derrick Dalley presses mining sector investment

Eight months after the idling of the Scully Mine in Wabush, less than a month after putting a pin in construction of a mine-fuelling power line and facing continued, dismal pricing for iron ore, the Government of Newfoundland and Labrador is actively promoting iron mining in Labrador West.

Natural Resources Minister Derrick Dalley told The Telegram Wednesday the potential in iron ore was key to his presentations and conversations during a 10-day mission to China earlier this month.

He took to the microphone at industry gatherings in Shanghai and Beijing, at the Canada Natural Resources Forum and Canada Mineral Investment Forum. He met with the Canadian Ambassador to China, representatives for China’s National Development and Reform Commission, and Ministry of Land and Resources, and steel producers from companies including Wisco and Hebei Iron and Steel.

“From my perspective, it was a great opportunity to reinforce the relationship that we had forged in recent years, to understand the China economy, but as well to present on behalf of the province some opportunities and to encourage Chinese investment,” he said.

The province, it was noted in a statement issued earlier this month, provided $13,900 to help Mining Industry NL representatives make the trip and maintain a trade show booth at China Mining, the continent’s largest mining conference.

CEO Mocks Analyst, Refuses To Answer His Question On Public Webcast Because His Stock-Price Target Is Too Low – by Myles Udland (Business Insider – October 29, 2014)

October 30, 2014

http://www.businessinsider.com/

Lourenco Goncalves, CEO of the mining and natural resources company Cliffs Natural, doesn’t take questions from haters.

On Cliffs’ earnings conference call on Tuesday morning, Goncalves told Wells Fargo analyst Sam Dubinsky that he wouldn’t answer Dubinsky’s questions because “you already know everything about my company.”

“You have a $4 price target and you think we can’t sell assets, so I’m going to take the next question, I’m not going to answer you,” Goncalves said. It is a jarring exchange.

In a note to clients following the report, Dubinsky wrote that Goncalves was “pretty bold” on the earnings call. It was also Goncalves’ first earnings call as CEO since being named to the position on Aug. 7.

And the exchange, or really just the shutting down of Dubinsky’s questions by Goncalves, shows some of the complications inherent in the relationship between companies and analysts.

It is Dubinsky’s job, as a research analyst, to publish his assessment of the companies in his coverage area and, based on this work, publish a recommendation on how he believes the stock will perform going forward.

Iron ore is wreaking havoc on WA. Welcome to capitalism, Colin Barnett – by Greg Jericho (The Guardian – October 27, 2014)

October 29, 2014

http://www.theguardian.com/uk

Collapsing iron ore prices are set to smash the Western Australian budget. But the premier can’t blame the miners when the state’s forecasts were too high

It’s not often you hear an Australian politician grumbling about increases in mining production, but that is just what the Western Australian premier, Colin Barnett, has been doing of late.

He has accused the two big miners, BHP Billiton and Rio Tinto, of flooding the market with iron ore and thus bringing down the price. The collapsing iron ore prices are set to smash the WA and Australian government’s budgets. But the governments can’t blame the miners when both budgets anticipated much higher iron ore prices than we now have.

As Wayne Swan often found out during his period as treasurer, government budgets are hostage to their forecasts. If the forecasts of various aspects of the economy – whether employment, inflation or the exchange rate – are too optimistic, the end result is often a much reduced level of tax revenue.

Lower iron ore prices affect both state and federal governments. State governments lose revenue from mining royalties whereas the federal government sees its company tax revenue fall (and other taxes if the lower prices result in workers being retrenched).

New Cliffs CEO sees ‘zero hope,’ no asset sale in Ontario’s Ring of Fire – by Peter Koven (National Post – October 29, 2014)

October 29, 2014

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

The new chief executive of Cliffs Natural Resources Inc. doubts that Ontario’s “Ring of Fire” will be developed for decades to come, or that anyone will buy his company’s rich chromite assets in the region in the near future.

Lourenco Goncalves, 55, said in an interview Tuesday that he has “zero hope” that a solution will be reached to spur on development in the region anytime soon.

“I don’t believe under my watch, and I plan to stay [alive] for the next 50 years… that the Ring of Fire will be developed,” he said.

A handful of junior mining companies, including KWG Resources Inc. and Noront Resources Ltd., are more optimistic and are interested in buying Cliffs’ Ring of Fire properties. But according to Mr. Goncalves, they all have the same problem: “They do not have any money.”

His comments have to be discouraging for the Ontario government, which made the Ring of Fire the centerpiece of its northern development plans. To date, Cleveland-based Cliffs is the only large mining company to take a serious interest in the area.

The Ring of Fire, located in the remote James Bay Lowlands, was discovered amid much fanfare in 2007. It is thought to hold about $60-billion of chromite, base metals and other minerals.

Cliffs Turnaround Plan Derailed by Iron Ore at 5-Year Low – by Sonja Elmquist (Bloomberg News – October 27, 2014)

October 28, 2014

http://www.bloomberg.com/

Other assets are being sold off quickly. The sale of a minority holding in a graphite
mining company was completed in August. Goncalves said he’s trying to sell a chromite
project in Canada’s Ring of Fire mining region “as soon as I can.”

Activist investor Casablanca Capital LLC’s plan to revive the fortunes of the largest iron ore producer in the U.S. is crumbling as the price of the commodity drops to a five-year low.

Casablanca went public in January with demands for Cliffs Natural Resources Inc. (CLF) to spin off or sell foreign mines and return more cash to investors. Casablanca won a proxy contest in July with the election of its slate of directors on the Cliffs board, one of whom was appointed chief executive officer.

With the iron ore market now in a worse state than it was at the start of the year, Cliffs may struggle to sell mines for a satisfactory price. Instead of raising its dividend, the Cleveland-based miner may have to eliminate the payout entirely, analysts at Citigroup Inc. and Nomura Holdings Inc. say.

A higher dividend “was something Casablanca promised before I joined,” Chairman and CEO Lourenco Goncalves said by phone in an Oct. 14 interview. “I’m not Casablanca.”

Cliffs books $5.9bn loss on iron-ore, coal asset write-downs – by Henry Lazenby (MiningWeekly.com – October 28, 2014)

October 28, 2014

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – US miner Cliffs Natural Resources reported a third-quarter net loss of $5.9-billion, or $38.49 a share, after booking a $5.7-billion write-down of its iron-ore and coal assets.

The Cleveland, Ohio-based company, who came under new management in July, following activist shareholder Casablanca Capital’s victory in a proxy contest, wrote down $4.5-billion related to the Bloom Lake iron-ore project, in Quebec, $28-million related to the shuttered Wabush iron-ore mine, in Labrador, $390-million related to its Asia Pacific Iron Ore (APIO) business segment and $539-million related to its North American Coal assets.

The company also booked a $254-million charge on its chromite assets, after indefinitely pulling out of Ontario’s Ring of Fire earlier this year.

Excluding the one-off charges, the company reported an adjusted profit of $33-million, or $0.21 a share, compared with an adjusted net income of $144-million, or $0.88 a share, in the same three-month period ended October 30 a year earlier.

Consolidated revenues of $1.3-billion were 16% lower year-on-year, mainly owing to iron-ore pricing sliding 32% in the past year, while metallurgical coal pricing declined 17%.

Mali eyes $9.5bn rail projects to unlock iron ore, bauxite deposits – by Tiemoko Diallo and Bate Felix (Reuters/The Africa Report – October 27, 2014)

October 28, 2014

http://www.theafricareport.com/

Bamako – Landlocked Mali aims to diversify its mining sector away from gold with Chinese-built rail projects worth $9.5 billion that would link it to the Atlantic coast, even as slowing Chinese growth and falling commodity prices cool investment.

The West African nation – the continent’s third-largest gold producer – said last month it had signed a string of investment deals with China totalling $11 billion, with most of this going to finance the rail deals.

Chinese authorities, however, have not confirmed the investment. Mali said $8 billion would finance a 900-km (560-mile) railway to Guinea’s port capital Conakry and $1.5 billion would renovate a rail link to Senegal’s capital Dakar, Mali’s main gateway port.

The improved transport links would attract investors to under-explored resources such as iron ore, bauxite and uranium that are bulkier and more costly to transport than gold. “The infrastructure will enable Mali to end its dependency on gold,” said Lassana Guindo, an adviser at the mines ministry.

President Ibrahim Boubacar Keita is striving to kick start Mali’s economy after a brief French-led war in early 2013 against northern Islamist rebels dragged it into recession.

Analysis Iron ore and rare earth metals mining: an industry under siege? – by Wayne Visser (The Guardian – October 24, 2014)

October 27, 2014

http://www.theguardian.com/us

Resource scarcity and human rights issues surrounding metals extraction, coupled with unrelenting global demand mean the industry is facing some tough realities

The good news: the number of people living in extreme poverty could drop from 1.2 billion in 2010 to under 100 million by 2050, according to UN projections. The bad news is that the flotilla of hope currently rising on the tide of economic growth in emerging countries is at serious risk of being dragged down under the waves. The reason is growing resource scarcity and the environmental disasters that could ensue.

As always, the poorest will be worst affected. The UNDP projects that, under an environmental disaster scenario, instead of reducing the population living in extreme poverty in south Asia from over half a billion to less than 100m by 2050, it could rise to 1.2bn. In sub-Saharan Africa, the numbers may rise from under 400m to over a billion. For the world as a whole, an environmental disaster scenario could mean 3.1 billion more people living in extreme poverty in 2050, as compared with an accelerated development scenario.

The message is simple: unless these booming economies – and the high-income countries they churn out ‘widgets’ for – can lighten the weighty anchor of resource consumption, we will all, sooner or later, get that sinking feeling. To illustrate the point, demand for steel – driven in no small part by a global car fleet doubling to 1.7bn by 2030 – is expected to increase by about 80% from 1.3bn tonnes in 2010 to 2.3bn tonnes in 2030. These trends raise red flags about material shortages of many metals in the future.

BHP CEO defends iron ore strategy as best play in gloomy market – by Silvia Antonioli (Reuters U.S. – October 23, 2014)

October 24, 2014

http://www.reuters.com/

LONDON – (Reuters) – BHP Billiton’s chief executive said its strategy of high-volume iron ore production was the best way to profit in a gloomy market, defending a plan that has come under growing criticism for depressing prices.

Iron ore, the biggest earner for global miner BHP Billiton, has lost about 40 percent of its value this year, reaching five-year lows, as big increases in new supply from top three miners Vale, Rio Tinto and BHP have exceeded lackluster demand.

Analysts expect the price decline to continue in the next few years under the weight of extra supply.

BHP has said it intends to boost production at existing assets by 65 million tonnes to 290 million a year by June 2017 and plans to cut its production costs to overtake rival Rio Tinto as the cheapest iron ore supplier to China.

“The lowest-cost producer has a right to continue to produce at very high margins in a free market,” BHP Chief Executive Andrew Mackenzie told reporters after the company’s annual general meeting in London.

“We have always been of the view that the iron ore market is more likely to decline than rise, and therefore producing the maximum amount we can now is very sensible.”

Iron ore giants win first round in global battle but knockout unlikely – by Clyde Russell (Reuters U.S. – October 23, 2014)

October 23, 2014

http://www.reuters.com/

LAUNCESTON, Australia – Oct 23 (Reuters) – There is now no doubt that the big three global iron ore miners are producing record amounts in their bid to dominate the industry. The question remains, what will happen if they succeed?

Anglo-Australian giants Rio Tinto and BHP Billiton both reported record output in their latest quarterly reports, and affirmed they were on track to boost production even further.

Top producer, Brazil’s Vale is also increasing output, with Brazilian trade figures showing iron ore exports rose 16.7 percent in September from August to 33 million tonnes.

These figures show that the output side of the plan to dominate global seaborne iron ore trade is going quite well for the big three.

In the case of BHP and Rio Tinto, they are well-placed to continue to put pressure on competitors based in their home turf of Western Australia state, as well as those in other parts of the world.

With the lowest cash costs, in the region between $20 to $30 a tonne, and plans to strip out even more costs, they can survive and prosper even if iron ore prices remain weak.

NEWS RELEASE: Government of Quebec Forms a Partnership with Champion Iron and Adriana Resources to Advance Labrador Trough Rail Feasibility

October 23, 2014

MONTREAL, QUEBEC and TORONTO, ONTARIO–(Marketwired – Oct. 21, 2014) – The board of Champion Iron Limited (ASX:CIA)(TSX:CIA)(“Champion” or the “Company”) is pleased to advise that the Government of Québec and Lac Otelnuk Mining Ltd., a joint venture between Adriana Resources (“Adriana”) and WISCO International Resources Development & Investment Limited, have formed a partnership with Champion, “La Société ferroviaire du Nord québécois, société en commandite (“SFNQ”).

The SFNQ was formed recently, following the tabling by the Québec government of its 2014-2015 budget in June, as a partnership of government and industry and assigned the responsibility of managing the implementation of the Feasibility Study for a new Labrador Trough rail line.

The Québec government has set aside a maximum of C$20 million from its Plan Nord Fund to contribute to the study. For its part, Champion’s contribution of sunk costs is valued up to C$6 million. Among other major economic and wide-reaching social benefits, the new rail infrastructure when developed will enhance the Québec-based mining industry’s ability to service world markets with competitive long-term tariffs.
Champion’s subsidiary Champion Iron Mines Limited is a founding partner of the SFNQ, which is open to all miners in the region.

Champion’s Chairman and CEO Michael O’Keeffe said, “The SFNQ partnership includes the Government of Québec and fellow mining group Lac Otelnuk Mining Ltd, with an open invitation to others from within industry to join this important initiative”.

Mining: End of Iron Age – by Honore Banda (The Africa Report – October 21, 2014)

October 23, 2014

http://www.theafricareport.com/

Douala, Cameroon – Low prices and high supplies are driving iron ore prices down. Analysts say large companies will survive the crunch but many smaller producers and explorers may be faced with tough decisions.

In a red and muddy clearing along Cameroon’s densely forested border with the Republic of Congo, a fleet of diggers stands idle. High above the canopy of trees, dark clouds start to gather. It is an ominous portent for an iron ore project billed as transformative for the country.

Three years ago, the Mbalam mining project, spearheaded by Australian explorer Sundance Resources, was hailed by Cameroon’s President Paul Biya as a potential game changer for the Central African country. Now, as Sundance courts fresh investors to shore up its dwindling cash reserves while iron prices fall, the prospects look bad for the construction of a $5bn railway needed to make the mine economical.

Across the continent, a similar pattern emerges. From Guinea to Angola, mining projects set up to feed China’s seemingly insatiable appetite for raw materials face an uncertain future.

Demand from the world’s largest consumer of iron ore is now cooling, and the determination of the three biggest producers – Rio Tinto, Vale and BHP Billiton – to plough ahead with expansion plans is bad news for smaller rivals, many of whom have chosen Central and West Africa’s undeveloped – and thus higher cost – deposits as their way into the mix.

Mexico’s Antidrug Push Weighs on Iron-Ore Trade With China – by Chin-Wei Yap (Wall Street Journal – October 20, 2014)

October 21, 2014

http://online.wsj.com/home-page

Mexico’s Total Iron-Ore Exports Likely to Fall 80%

TIANJIN, China—Mexico’s exports of iron ore have plunged in the wake of a bid by authorities to break the grip of drug cartels on parts of the country’s iron-ore industry, a Mexican official said.

Mexico will likely export just 2 million metric tons of iron ore this year, in part because of a crackdown on cartel-linked shipments to China, Mario Cantú, Mexico’s coordinator general of minerals, said on the sidelines of an industry conference in the northeastern Chinese city of Tianjin. Last year, Mexico exported about 10 million tons of the mineral, 9 million of which were bound for China.

It isn’t clear the extent to which exports specifically to China will drop this year, Mr. Cantú said, but the decrease will likely correspond with the 80% drop in total Mexican iron-ore exports.

The export collapse is linked to Mexico’s moves to combat drug cartels operating in the country’s top ore-producing state, Michoacán, and their expansion into lucrative shipments of the mineral to China, the world’s biggest buyer of iron ore.

In addition to confiscating iron-ore that officials said was linked to drug cartels and closing facilities where the mineral was processed, Mexican authorities this year introduced a new export permit aimed at curbing illegal shipments.

Iron Ore Risks Extending Collpapse on Supplies: Moody’s – by Phoebe Sedgman (Bloomberg News – October 20, 2014)

October 21, 2014

http://www.businessweek.com/

The collapse in iron ore prices may have further to run as global supply increases and steel-demand growth slows, according to Moody’s Investors Service, which said it may reduce ratings on producers.

About 300 million metric tons of new and expanded supply will come on stream over the next few years, analysts including Carol Cowan said in an e-mailed report received today. Global steel-production growth in 2014 remains muted with China, the key driver of consumption, continuing to slow, Moody’s said.

Iron ore tumbled 39 percent this year after companies including Rio Tinto Group (RIO), BHP Billiton Ltd. and Vale SA raised low-cost output in Australia and Brazil, spurring a global glut. The market is in the midst of a transition without precedent in recent commodity history as supply surges and some higher-cost mines are displaced, according to Macquarie Group Ltd.

“Iron ore prices have collapsed,” Moody’s said in the report, which was dated Oct. 17. “With slowing global steel-production growth rates, iron ore prices remain vulnerable to the downside and we expect continued volatility.”

Ore with 62 percent content delivered to Qingdao, China, posted a third straight quarterly loss in the three months to September, and dropped to $77.97 a ton on Sept. 29, the lowest level since September 2009.

Iron ore price collapse claims more victims (Northern Miner – October 17, 2014)

October 20, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Cliffs Natural Resources (NYSE: CLF) and London Mining (LSE: LOND) have become the latest casualties of falling iron ore prices, with Cliffs declaring a US$6 billion non-cash impairment charge in the third quarter on its iron ore and coal assets, and London Mining placed into administration.

London Mining says it will try to work with its administrator, PwC, to maintain its Marampa iron ore mine in Sierra Leone as a going concern, while Cliffs is working with its banking group to get an amendment that will eliminate the debt-to-capitalization covenant of 45% currently present in its revolving credit facility, as the non-cash impairment charge will increase the debt-to-capitalization ratio over that threshold.

Iron ore prices have fallen to five-year lows and are down about 40% so far this year at about US$80 per tonne. When London Mining’s Marampa iron ore mine in Sierra Leone entered production in December 2011, iron ore was selling for about US$140 per tonne, well above today’s levels.

It’s not the first time Marampa, which was operated between 1933 and 1975 by the Sierra Leone Development Company and William Baird, has suffered from depressed prices. The mine was closed for a period of time in the 1960s due to low prices for the metal.