Archive | Iron Ore

Iron Seen in Low-$40s by Citi as Supply Grows, Demand Peaks – by Jasmine Ng (Bloomberg News – June 19, 2017)

Iron ore may extend a slump into the low-$40s as supplies swell and demand reaches a short-term peak amid steel mill restarts and ramp-ups in China, according to Citigroup Inc., which cut its forecasts by as much as 20 percent over the next year.

The nadir in prices may occur in six to eight months, analysts including Tracy Liao wrote in a report received Monday. Iron ore is seen at $51 a metric ton in the third quarter compared with a previous estimate of $64, and at $48 in the final three months of the year, down from $60.

The raw material has sunk by more than a third since rising to almost $95 in February as global output increases, with miners such as Vale SA in Brazil and Australia’s Roy Hill Holdings Pty boosting capacity, and China’s efforts to curb financial leverage hurt demand. Continue Reading →

Minnesota officials tried to avoid another mining failure – by Don Davis (Duluth News Tribune – June 19, 2017)

ST. PAUL — Minnesota leaders hope a lease they are offering to a new mining company will reverse a decade of frustrating failure in one area they felt held lots of promise.

Officials who feel they were burned by Essar Steel Minnesota, which did not fulfill state taconite mining requirements, then declared bankruptcy, on Monday, June 19, folded what they hope are iron-clad guarantees into a new mineral lease. They hope the new mining company will produce taconite and turn it into an in-demand iron product where Essar Steel failed for years.

Also Monday, it appeared the White House is on the cusp of a major decision about whether to impose new restrictions on steel imports, a choice that has divided President Donald Trump’s administration while sparking global fears about a burgeoning trade war. Steel imports have been blamed for recent years’ economic woes on northeast Minnesota’s Iron Range, where taconite is told to produce steel elsewhere. Continue Reading →

Update: Judge approves Essar bankruptcy settlement – by John Myers (Duluth News Tribune – June 13, 2017)

Chippewa Capital Partners has reached an agreement with Gov. Mark Dayton over mineral leases at the former Essar Steel Minnesota project in Nashwauk, removing one of the last obstacles to a bankruptcy settlement approved this morning in Delaware.

The agreement allows Chippewa — a joint venture of London steel and energy conglomerate GFG Alliance and Roanoke, Va., billionaire Tom Clarke — to take over the bankrupt, half-built taconite iron ore mine and processing center, restart construction and start mining and processing ore by 2020.

India-based Essar pumped $1.8 billion into the Nashwauk project over seven years but then walked away in late 2015, out of cash and more than $1 billion in debt, filing for bankruptcy last July. Continue Reading →

U.S. company signs collective agreement to restart Wabush Mines – by Andrew Topf ( – June 13, 2017)

Miners at the closed-down Wabush Mines in Labrador could be back on the job thanks to the recent signing of a collective agreement with the union. Five hundred people were thrown out of work in 2014 when Cliffs Natural Resources (NYSE:CLF) shut the gates on the operation in Western Labrador.

Last week however the United Steelworkers Union had good news to share, telling its members it signed a five-year collective agreement with Tacora Resources, an American company without a functioning website, for the Scully Mine operation.

Part of Wabush Mines, Scully Mine began operating in 1965, with iron concentrate railed to a pelletizing facility in Pointe Noire, Quebec, for shipment to Europe and throughout North America. Before it closed in 2014, a victim of low iron ore prices, Wabush Mines was Canada’s third largest iron ore operation, with an annual capacity of 6 million tonnes. The site since then has been tied up in regulatory proceedings. Continue Reading →

Inside Simandou: The mining project that has cursed all who come near it – by Jon Yeomans (The Telegraph – June 5, 2017)

We are Israelis and we know how to fight. We are not going to let it go.” Beny Steinmetz’s words to a tribunal in Paris two weeks ago capped a colourful testimony via videolink from Israel. The mining magnate’s rare public appearance was an attempt to clear his name and disentangle his company, Beny Steinmetz Group Resources (BSGR), from one of the industry’s biggest corruption scandals.

The two-week hearing at the International Centre for the Settlement of Investment Disputes (ICSID) ended on Friday, the latest chapter in a decade-long saga centred on the impoverished West African country of Guinea. It is, according to lawyers for Guinea, “an exceptional case of exceptional importance with evidence of corruption which is equally exceptional”.

The hearing at ICSID, two years in the making, came about because BSGR believes it was wrongfully stripped of its rights to mine in Guinea in 2014. The West African country claims that BSGR paid bribes to win access to Simandou, a giant, untapped deposit of iron ore; the miner has always denied wrongdoing. Continue Reading →

Iron ore market can absorb supply loss from BHP fire: traders – by James Regan (Reuters U.S. – June 1, 2017)

SYDNEY – A well-supplied global iron ore market will easily absorb lost production due to a fire at BHP’s big Mt Whaleback iron ore mine in Australia, traders in the commodity said on Thursday.

A fire earlier on Thursday broke out at the mine, the largest of seven operated by BHP in the Pilbara iron ore belt of Western Australia state. BHP said all staff were safe but that operations had been suspended as an investigation got underway.

Images in local media showed fire and smoke billowing out of the processing facilities at the mine. “All personnel at site have been accounted for and we are working to ensure the site is safe,” a company spokeswoman said. Continue Reading →

Vedanta, Vale Lead Base-Metals Mining Drop as Iron Ore Plunges – by Mark Burton and Susanne Walker Barton (Bloomberg News – May 31, 2017)

(Bloomberg) — Vedanta Resources Plc and Vale SA led declines in industrial-mining companies as Chinese investors returning from a public holiday drove iron ore to a seven-month low. Nickel traded near its lowest in a year after Indonesia’s largest producer started shipping ore to China.

An index of 18 producers tracked by Bloomberg Intelligence headed for a third straight loss, with Vedanta dropping 5.7 percent and Rio de Janeiro-based Vale sliding 5 percent. Earlier, a 6.5 percent slump took iron ore to 424.5 yuan ($62.3) a metric ton on the Dalian Commodity Exchange amid signs of ample supply. The September contract finished May down 19 percent, in the longest run of monthly declines since November 2015.

“The fundamentals in iron ore are relatively weak but the selloff is more to do with speculative traders’ positions,” Xiao Fu, an analyst at Bank of China International Global Commodities, said by email. “The bears are winning at the moment.” Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →

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

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. Continue Reading →