Archive | Iron Ore

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

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

Iron Ore Takes a Battering as Bear Market Engulfs China Futures – by Ranjeetha Pakiam (Bloomberg News – 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.” Continue Reading →

The Economist explains: How Australia has gone 25 years without a recession (The Economist – March 16, 2017)

http://www.economist.com/

WESTERN AUSTRALIA’S iron ore and Queensland’s coal were at the centre of Australia’s recent mining boom, stoked by the red-hot growth of China’s steelmaking industry. At its height about five years ago, mining investment accounted for 9% of national GDP. But as investment started to decline in 2013, Western Australia’s debt soared.

At 6.5%, its unemployment is now Australia’s highest. If the pattern of earlier booms had followed, Western Australia’s plight would have reverberated around the country and ended in a national bust. Yet the economy’s growth has stayed intact, notching up 25 years without a recession. How has Australia managed a feat that has defied most other rich countries?

Australia’s mining booms over the past 160-odd years made the country feel rich and confident while they lasted. Workers made big money, and this brought prosperity to far-flung regions producing gold, coal, gas and other commodities. Recessions followed nearly all earlier booms, including the most recent one, in the 1980s, largely because the upheaval proved too big a shock for an economy that was highly regulated. Continue Reading →

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

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. Continue Reading →

Top Iron Miners’ Cash Juggernaut Set to Survive Price Crash – by David Stringer (Bloomberg News – 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.” Continue Reading →

Life in Labrador iron ore scene – by Daniel Gleeson (Mining Journal – March 1, 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”. Continue Reading →

China to slash steel, aluminium output in bid to check smog (Australian Financial Review/Reuters – 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. Continue Reading →

UPDATE 5-Vale intensifies CEO search as Ferreira to quit -sources – by Guillermo Parra-Bernal and Tatiana Bautzer (Reuters India – February 25, 2017)

http://in.reuters.com/

Feb 24 Vale SA has stepped up the search for a new chief executive officer as Murilo Ferreira announced his departure, signaling efforts by some top shareholders to shield the world’s No. 1 iron producer from political interference, three people with direct knowledge of the situation said on Friday.

Earlier in the day, Rio de Janeiro-based Vale said Ferreira will step down as CEO when his term expires on May 26. In a securities filing, Vale did not name a potential replacement for Ferreira or provide details as to how a transition will occur.

Some of Vale’s controlling shareholders lean towards picking one of Ferreira’s lieutenants to spearhead Vale’s transition into a company with dispersed share ownership, the people said. External candidates with previous experience at Vale are also under consideration, the people added. Continue Reading →

Vale CEO Ousted as Brazil Seeks New Blood Before Reorganization – by Sabrina Valle and Peter Millard (Bloomberg News – February 24, 2017)

https://www.bloomberg.com/

Brazil is moving to cast off the last shackles of government influence at iron-ore giant Vale SA — but not before replacing the CEO with someone more politically palatable.

Murilo Ferreira’s six-year contract won’t be renewed when it expires in May, the Rio de Janeiro-based company said in a statement Friday. The announcement came days after Vale unveiled a plan to scrap its controlling shareholder pact amid criticism the miner was run like a quasi state company.

While the company didn’t say who decided Ferreira’s fate, analysts including Upside Investor’s Pedro Galdi say politics were involved. He took the CEO job in 2011 as part of a management shakeup driven by then-president Dilma Rousseff. The current government of Michel Temer has sought to distance itself from authorities and executives with perceived allegiances to Rousseff, who was impeached last year. Continue Reading →

IOC going ahead with Wabush 3 mine, construction to begin in spring – by Jacob Barker and Geoff Bartlett (CBC News Newfoundland and Labrador – February 23, 2017)

http://www.cbc.ca/news/canada/newfoundland-labrador/

The Iron Ore Company of Canada says the long-awaited Wabush 3 mining project in Labrador West will be going ahead. The new pit comes with a $79-million investment and should increase the ore output by about five million tonnes per year.

Clayton Walker, chief executive officer and president, said it should also extend the life of the mine by 12 years. “We’re really excited about the announcement,” Walker said on Thursday afternoon.

The new pit will rely on much of the existing infrastructure but construction is expected to create about 70 jobs, according to Walker. The Wabush 3 extension was put on hold last May, with IOC citing poor production and sales performance over the previous year. Continue Reading →

Vale Dusts Off Crystal Ball, Sees $70-$75 ‘Floor’ for Iron Ore – by Paul Kiernan (4-traders.com/Wall Street Journal – February 23, 2017)

http://www.4-traders.com/

RIO DE JANEIRO — Brazilian mining company Vale SA is back to forecasting iron-ore prices after a four-month rally in the market injected executives with a level of optimism not seen in years.

Vale’s iron-ore director dusted off his so-called crystal ball Thursday to predict that prices for the commodity will have a “floor” of $70 to $75 and could average above $80 for the year.

“In summary, 2017 is going to be a very strong year,” the executive, Peter Poppinga, said in a conference call. “Steel demand is greater than in 2016. New supply that’s going to come is less than in 2016, and stocks are unbalanced. Therefore, prices will be significantly higher than in 2016.” Continue Reading →

Iron ore rockets towards $US100 a tonne – by Jessica Sier (Sydney Morning Herald – February 22, 2017)

http://www.smh.com.au/

The price of iron ore has surged higher still, reaching its highest level since mid-2014, and flirting with the $US100 a tonne mark. A pick up in steel futures has sent Australia’s largest export soaring 21 per cent so far this year, and up 84 per cent in the last twelve months.

Iron ore, with a ferrous content of 62 per cent was fetching $US94.86 a tonne on Wednesday morning. China’s Dalian Commodity Exchange, most-active futures surged as much as 30 per cent this year to 723yuan ($136).

Consolidation in the Chinese steel industry, which iron ore fuels, has seen steel exports are slump 5 per cent month on month and down 24 per cent year on year, while iron ore imports are up 12 per cent year on year. Continue Reading →

CLIFFS MARKS 170 YEARS OF MINING – by Jim Romsaas (Mesabi Daily News – February 21, 2017)

http://www.virginiamn.com/

COMPANY CELEBRATES MILESTONE AND HISTORY ON THE IRON RANGE: NOW NORTH AMERICA’S LARGEST IRON ORE PRODUCER

Founded by 11 men from Cleveland in 1847, Cliffs Natural Resources is now known as North America’s largest producer of iron ore pellets. Celebrating 170 years as a company in 2017, Cliffs has been independent for all of the company’s long history and has a very positive outlook for this year, as well.

“The significance of this milestone cannot be over-emphasized. How many U.S. companies can state that they have been instrumental in building and shaping our society since 1847? Not many,’’ said Lourenco Goncalves, chairman, president and CEO of Cliffs.

Cliffs, which has weathered the ups and downs of the industry and also world events, now has Minnesota operations at United Taconite (Eveleth), Hibbing Taconite, and Northshore Mining in Silver Bay. Continue Reading →

Vale to scrap controlling bloc, merge shares in major governance move – by Guillermo Parra-Bernal and Marta Nogueira (Globe and Mail/Reuters – February 20, 2017)

http://www.theglobeandmail.com/

Vale SA plans to become a company with no defined controlling shareholder as soon as possible, in a landmark step aimed at enhancing transparency and equal rights for all shareholders in the world’s largest iron ore producer.

Controlling shareholders grouped under holding company Valepar SA agreed to stay together for up to 3-1/2 more years. Under those terms, they will present a proposal soon by which Vale will incorporate Valepar and proceed to merge the company’s several classes of stock into a single, common one by November.

The existing 20-year accord governing Valepar that expires in May will be extended through November to guarantee the transition. Holders of Vale’s Class A preferred shares who join the share conversion voluntarily will receive 0.9342 common stock, as part of the process. Continue Reading →