420 on Minn. Iron Range face layoffs as United Taconite idles plants – by Dan Kraker (Minnesota Public Radio – July 30, 2015)

http://www.mprnews.org/

In another blow to Minnesota’s reeling iron ore industry, more layoffs were announced on the Iron Range Wednesday.

Cliffs Natural Resources will be temporarily closing its United Taconite mine in Eveleth and its pellet plant in Forbes. The moves affect 420 employees. The latest news brings the number of layoffs announced this year to more than 1,000.

Eveleth Mayor Bob Vlaisavljevich said he had been nervously awaiting an announcement for weeks, ever since he saw the huge stockpiles of taconite pellets sitting alongside the Duluth harbor, waiting to be shipped to steelmakers.

“It was kind of a scary thought, down by the harbor there. When you see them they’re about a quarter mile long, three or four of them,” he recalled. “A lot of boatloads.”

Cliffs CEO Lourenco Goncalves cited that huge inventory of pellets as one reason the company would idle United Taconite for about six months.

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UPDATE 2-India’s Vedanta looks to restart Goa mines by October – by Aman Shah (Reuters U.S. – July 29, 2015)

http://www.reuters.com/article

MUMBAI, July 29 (Reuters) – India’s Vedanta Ltd said on Wednesday it expected to restart iron ore mining by October in top exporting Goa province and that talks were continuing with regulators for merging with its cash-rich unit Cairn India.

The mining and energy group, which has been hit by a slump in crude prices and mining bans in key producing states, also posted a consolidated net profit of 8.66 billion rupees ($135.61 million) for its fiscal first quarter to June 30.

That compared with a profit of 3.76 billion rupees in the same period last year, which was hurt by a one-time charge of 21.28 billion rupees. Excluding the impact of one-off charge, the company’s first-quarter profit was 35.4 percent lower than a year earlier.

Chief Executive Tom Albanese said on a conference call Vedanta was hoping to get approvals as early as next month to restart a few mines in Goa and was positioned to restart mining at a rate of 5.5 million tonnes a year.

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Mining industry faces job losses as coal and iron ore prices remain depressed (The Guardian – July 29, 2015)

http://www.theguardian.com/

Almost 80% of Australian mining leaders are reducing capital expenditure, up from 44% last year, a report has found

The Australian mining industry is bracing for more job losses and mine closures next year as coal and iron ore prices remain depressed.

Almost 80% of mining leaders are reducing capital expenditure, up from 44% last year, a report by Newport Consulting has found.

While mining company bosses are still reluctant to spend money or make investments, the latest Newport Mining Business Outlook Report shows 16% of mining leaders are cautiously optimistic about their growth prospects for the next 12 months.

Newport managing director David Hand said more job losses were expected as coal and iron ore miners fight to remain competitive.

“Miners are likely to make decisions in the next 12 months to shut more operations,” Hand said. “There are thousands of jobs hanging in the balance right across New South Wales.”

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China air quality crackdown set to hurt iron ore demand – by Michael Roddan (The Australian – July 28, 2015)

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

The troubles for the iron ore price are set to continue, with a Beijing crackdown on air pollution in September expected to reduce demand from the region’s steel mills.

Meanwhile, Australian exports of the commodity are set to rebound from a sluggish July, positioning the price of Australia’s biggest export for a renewed plunge, after only recently bouncing from a decade-low.

The Chinese government is likely to limit steel production in Hebei province, which surrounds Beijing and major iron ore port Tianjin, in a bid to ensure higher air quality during World War II commemorations in September, Macquarie Wealth Management says in a research note.

The clear-sky days will be similar to the “APEC Blue” of last November, when the government clamped down on emissions during the 26th annual gathering of Asia Pacific leaders in Beijing.

“Steel mills near Beijing, particularly those in Hebei province, will probably be forced to shut down production again,” Macquarie said in a research note. “This clearly spells trouble for iron ore prices.”

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Andrew ‘Twiggy’ Forrest: A bundle of contradictions – by Stephen Long (Australian Broadcasting Corporation – July 27, 2015)

http://www.abc.net.au/news/

Andrew Forrest is a bundle of contradictions. He is a man who professes his love for Aboriginal people, but plays tough when they stand in the way of his mines.

He is a free-marketeer who went close to arguing for an industry cartel, and a generous philanthropist, who has shackled his charities to his commercial interests. This year, Mr Forrest has been calling for a Parliamentary Inquiry into the iron ore market.

Twiggy is standing up for the battlers and the national interest against “multinationals” BHP and Rio Tinto, he says, who have deliberately driven down the iron ore price.

He has accused them of talking down the price and of pumping out too much volume. Leave aside the inconvenient fact that no company is more responsible for the expansion of iron ore exports in recent years than his.

There is much to admire about the man they call Twiggy (a moniker, owing to his surname Forrest, he has been stuck with since childhood).

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Miners Shed Thousands of Jobs as Commodities Prices Slide – by Scott Patterson (Wall Street Journal – July 24, 2015)

http://www.wsj.com/

Anglo American to cut 53,000 jobs, while Lonmin will cut 6,000 jobs over the next two years

The world’s biggest miners are hemorrhaging jobs as the price for almost everything they dig up—from gold to aluminum to copper—slides relentlessly downward.

Anglo American PLC, the U.K. mining titan, on Friday announced the most dramatic job-reduction figure yet in the ailing industry, saying it would slash 53,000 jobs over the next several years—including 6,000 in the corporate offices amounting to $500 million in savings. That would amount to a reduction of 35% of its current workforce of 151,000.

“We’re looking at every dollar and pulling everything back,” Anglo-American Chief Executive Mark Cutifani said in a presentation of the miner’s first-half earnings results to investors Friday. “It’s a constant process driving out costs.”

Also on Friday, South Africa’s Lonmin PLC said it would cut 6,000 workers over the next two years. BHP Billiton has recently cut hundreds of jobs linked to its giant copper, gold and uranium mine, Olympic Dam, in South Australia so far this year.

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Vale’s Nickel IPO Chances Wane as Fires, Shutdowns Hurt Output – by Juan Pablo Spinetto(Bloomberg News – July 23, 2015)

http://www.bloomberg.com/

A fire in Canada, disruptions in Indonesia and shutdowns in Brazil and New Caledonia: it was tough getting nickel out of the ground last quarter for Vale SA.

Output of the metal at Vale, the world’s largest producer, missed estimates for a second consecutive quarter. The lower-than-expected production comes as a plunge in metal prices makes the Rio de Janeiro-based company’s plan to sell as much as 30 percent of the unit in an initial public offering less likely.

Vale said in its second-quarter output report Thursday that nickel production rose less than 9 percent to 67,100 metric tons, missing a 73,900-ton average forecast by seven analysts surveyed by Bloomberg. The result, called “poor” by BMO Capital Markets in a research note, puts production for the first half at 136,000 tons, or less than 45 percent of the company’s annual target of 303,000 tons.

Operations in the quarter were affected by a fire at its operations in Sudbury, Ontario, which reduced nickel and copper production by 5,000 tons each, furnace maintenance in Indonesia and a “brief shutdown” for plant improvement at the Onca Puma project in Brazil, Vale said. The miner is planning to close facilities at Sudbury and Thompson in August for maintenance, it said.

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[Vale] World’s Top Iron-Ore Miner Presses on Output as Price Slide – by Juan Pablo Spinetto (Bloomberg News – July 23, 2015)

http://www.bloomberg.com/

Vale SA boosted iron-ore production last quarter to the second-highest ever for the company, exceeding analyst estimates and worsening a supply glut that saw prices of the steelmaking ingredient collapse.

Iron-ore output rose 7.4 percent to 85.3 million metric tons in the quarter through June 30, compared with 79.4 million tons a year ago, the company said in a statement Thursday. The result, which excludes third-party purchases and operations at a venture with BHP Billiton Plc, topped the 82.5 million-ton average of eight analyst estimates compiled by Bloomberg.

The Rio de Janeiro-based company, the world’s top iron-ore producer, is expanding supply to a record 340 million tons this year while seeking to replace low-quality ore with premium products to improve profits. The expansion by Vale and its main rivals BHP and Rio Tinto Group coincides with an unexpected decline in demand from China, the biggest iron-ore buyer, prompting Goldman Sachs Group Inc. to forecast weaker prices in incoming quarters.

The increase in Vale’s three main production systems was driven by better-than-expected weather and expanded operations at the N4WS mine and Plant 2 unit in the Carajas complex, Vale said in the statement. Output for the first-half reached a record 159.8 million tons, 6.2 percent more than last year.

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Mining Giants’ Push for Iron Ore Tests Mettle of Smaller Miners – by Rhiannon Hoyle (Wall Street Journal – July 22, 2015)

http://www.wsj.com/

The four biggest iron-ore suppliers accounted for 71% of all iron-ore shipments in 2014, and they aren’t slowing down

SYDNEY—Big Mining is tightening its grip on the iron-ore market.

As industry giants such as Rio Tinto PLC and BHP Billiton Ltd. dig up ever more of the steelmaking ingredient for export, the resulting supply glut has caused prices to slump. But the majors’ tactics are helping them squeeze out smaller rivals, increasing their oligopoly’s share of global trade in the ore.

The world’s four biggest iron-ore suppliers—Rio and BHP along with Brazil’s Vale SA and Australia’s Fortescue Metals Group Ltd.—accounted for 71% of the world’s iron-ore shipments in 2014, up from an average of 65% from 2009-13, according to Citi estimates. The bank now reckons that market share for the four could rise to 80% by 2018.

There is no sign the majors are ready to pull back.

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Iron Ore Supply to Overwhelm Weak China Demand, Goldman Predicts – by Jake Lloyd-Smith (Bloomberg News – July 20, 2015)

http://www.bloomberg.com/

Rising seaborne iron ore supplies over the next two quarters will probably overwhelm weak demand from mills in China, according to Goldman Sachs Group Inc., which said that a global glut was entering its second year.

While housing starts in China have recovered and infrastructure has overtaken property to become the largest market for steel, an improvement this half may not be strong enough to support iron ore, the bank said in a report. Prices are seen dropping over the next four quarters, from $49 a metric ton through September to $44 by the April-to-June period of 2016, according to analysts Christian Lelong and Amber Cai.

Iron ore sank to the lowest since 2009 this month amid concern that the biggest mining companies including Rio Tinto Group, BHP Billiton Ltd. and Vale SA are intent on boosting low-cost supply even as demand falters.

Imports by China fell in the first six months of the year, while local mills sold a record amount of output overseas. BHP, which is set to report quarterly production data tomorrow, said on Tuesday it’s spending $240 million to upgrade tug-boat operations at Port Hedland.

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Production cuts by Vale and Rio will not solve iron ore glut – by Neil Hume (Financial Times – July 17, 2015)

http://www.ft.com/home/us

The bruised and battered iron ore industry finally received some good news this week. First, Vale said it would withdraw 25m-30m tonnes of annual production from the market then Rio Tinto cut its total 2015 export forecast by 10m tonnes to 340m tonnes.

While welcome, it would be a mistake to think these announcements mark the beginning of a disciplined response from the industry’s biggest producers to an ongoing supply glut. They don’t.

Take Vale’s “cut”. After its share price jumped more than 6 per cent on the news, the Brazilian miner moved to clarify the remarks made by Peter Poppinga, its executive director of ferrous minerals.

Vale said there was no change to its output guidance for the year of 340m tonnes, or its longer-term target to produce 450m tonnes by 2018. Rather it was cutting production of high cost iron ore — the key ingredient in steelmaking — and replacing it with cleaner, lower cost output from some of its other mines.

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NIRB process will be thorough, Baffinland assures stakeholders (Nunatsiaq News – July 16, 2015)

http://www.nunatsiaqonline.ca/

Mary River dependent on growing its business to international market, company says

Baffinland Iron Mines Corp. got what it wanted earlier this week when the federal government granted the mining company an exemption that will allow its Phase 2 shipping expansion proposal to go directly to the Nunavut Impact Review Board for an environmental review.

But the mining company, which operates the Mary River iron mine in North Baffin, was hesitant about celebrating that news, given the reaction from a number of organizations, who say the request should never have bypassed the regional land use plan.

In a July 15 release, Baffinland said the NIRB assessment process will provide an opportunity for all stakeholders to look at the company’s proposal, which includes the expansion of their iron ore shipping season to about 10 months of the year and an increase in ore production from 4.2 million metric tons to 12 million metric tons per year.

“The project approval process in Nunavut is demanding and thorough, as it should be,” said Baffinland CEO Tom Paddon. “Baffinland’s continuing wish is that the project be given a fair and timely hearing. Proceeding to the environmental assessment process will ensure that occurs,” Paddon said.

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An iron ore civil war plays out on social media in Australia – by James Wilson and Neil Hume (Financial Times – July 16, 2015)

http://www.ft.com/home/us

“Our family. Our jobs. Our future,” is the message conveyed on the Facebook page and Twitter feed. Gazing out from the screen are a blonde woman, two blonde children, a pair of sheepdogs — and a miner wearing overalls.

This is the all-Australian family, with the mining sector at its heart, as envisaged by a campaign called “Our Iron Ore”. It is one of two competing public relations initiatives embroiled in bitter argument in Australia over this abundant commodity.

As the patriotic element of the “Our” campaign suggests, iron ore is anything but prosaic in Australia, whose economy relies heavily on the hundreds of millions of tonnes sucked in annually by China’s steelmaking industry. In Western Australia’s Pilbara region, the iron ore heartland, its price movements are part of everyday conversation.

In 2011, the price of iron ore scaled the heights of $190 per tonne and brought a bonanza for Australia. Four years later, the price has slumped by about 75 per cent: this month it fell below $45/t. Thousands of jobs are being cut and smaller, domestic miners are under pressure.

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UPDATE 2-Miner Anglo warns of up to $4 bln writedown on iron ore and coal assets – by Eric Onstad and Clara Denina (Reuters U.K. – July 16, 2015)

http://uk.reuters.com/

LONDON, July 16 (Reuters) – Mining group Anglo American has warned of a second multi-billion dollar writedown this year on its coal and iron ore assets, demonstrating the growing impact of sliding commodity prices.

The charge of between $3 billion and $4 billion flagged on Thursday, to be taken in its first-half results, comes on top of a $3.9 billion writedown Anglo took for similar reasons in February, when it also posted a 25 percent drop in underlying operating profit for 2014.

Anglo, the fifth-biggest diversified global mining group by stock market capitalisation, is not alone in feeling the pinch of tumbling commodity prices.

BHP Billiton said on Wednesday it will take a $2 billion impairment on its U.S. shale operations, the third writedown in three years.

Anglo has been fighting the impact of struggling metals prices by trying to improve the efficiency of its mining operations and by selling less profitable assets, including coal mines in Australia.

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Vale’s designs on China add to Rio, BHP drive for more iron ore – by James Regan (Reuters U.S. – July 15, 2015)

http://www.reuters.com/

SYDNEY – As Rio Tinto and BHP Billiton ship more iron ore than ever to China, the Australia mining giants face a fightback from Brazil’s Vale for market share that threatens to drive already weak prices even lower.

Rio Tinto and BHP, which will release quarterly production data this week and next, have been racing to keep up exports to boost profits while lower prices eat into margins.

They now face stiffer competition from Vale, which is also working its mines harder, after the world’s biggest producer won approval for its giant Valemax ships to unload in China, cutting down on freight costs.

With a capacity of 400,000 tonnes each, the 34 Valemaxes are the world’s biggest bulk carriers and twice the size of vessels used by Rio and BHP, but a ban on entering Chinese ports had severely curbed the cost efficiencies of the larger ships.

“BHP and Rio have been looking to raise volumes in this environment to maximize every tonne,” said Morgans Financial analyst James Wilson.

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