Iron Ore – Page 74 – Republic of Mining

The iron ore price equation that makes Fortescue attractive for China – – by Anne Hyland (Australian Financial Review – May 29, 2015)

May 29, 2015

http://www.afr.com/

CITIC Group and Baosteel Group, which are said to be interested in Fortescue Metals Group, are two of the most politicised companies in China. Baosteel is China’s leader in the steel industry and CITIC was anointed to make significant investments outside China, such as the $10 billion Sino Iron project, which has been described as the worst mining investment in Australia in the past decade.

What is almost certain is that CITIC and Baosteel, which is developing an iron ore project with Aurizon, won’t bid against each other for Fortescue or other resource companies. It would be politically unpalatable in China and it’s typically not what China Inc does.

While there would be a dozen companies in China capable of taking out Fortescue, only one would get the green light, say veteran China observers.

At the Stockbrokers Association conference on Thursday, Li Xinchuang, president of the China Metallurgical Industry Planning Association, firmed up speculation with comments that Fortescue would benefit from a Chinese investor, while saying he didn’t believe the argument that there was a global oversupply of iron ore.

The History of Erie Mining Company (Hometownfocus.us – May 29, 2015)

May 29, 2015

http://www.hometownfocus.us/

A project to document the history of the pioneering research, preliminary pilot plant, and construction and operation of the world’s first completely integrated taconite mine.

In early 2014, a team of willing and dedicated former Erie Mining Company/ LTV Mining employees began meeting monthly at the Hoyt Lakes City Hall. The team set as its purpose to document the initial development of Minnesota’s taconite Industry by preparing a history of the pioneering research, construction and operation of Erie Mining Company and the establishment of the town site of Hoyt Lakes.

Partnering with the St. Louis County Historical Society, the group established a goal of publishing a quality book, containing both the technical and pictorial history of the mine, plant site, railroad, power plant and harbor, town sites of Hoyt Lakes, Taconite Harbor, and Murphy City as well as the personal stories and experiences of the employees, contractors, vendors, and “town folk” who built and operated one of the world’s largest and most innovative green field mining operations, and one of our nation’s largest private capital enterprises of the past century.

The group contacted local historians, the Minnesota Historical Society and others, who confirmed that there are no comprehensive, historically accurate books documenting the history of the Erie Mining Company, or for that matter, any of Minnesota’s taconite mining and processing operations.

UPDATE 2-Australia iron ore magnate Rinehart weakened by court ruling – by Jane Wardell and James Regan (Reuters U.S. – May 28, 2015)

May 29, 2015

http://www.reuters.com/

SYDNEY, May 28 (Reuters) – Australian iron ore magnate Gina Rinehart’s eldest daughter won control of the $3 billion dollar family trust on Thursday in a judgment critical of Rinehart’s former control of the fund and attempts to block the long-running legal dispute.

The Supreme Court of New South Wales judgment loosens Rinehart’s legendary grip on her business empire, with almost 25 percent of Hancock Prospecting Pty Ltd held by the trust.

Rinehart owns the remainder of the family firm, which in turn owns 70 percent of Roy Hill, a Pilbara-based iron ore mine due to start shipments later this year.

South Korea’s POSCO, Japan’s Marubeni Corp and Taiwan’s China Steel Corp also have stakes in the mine, which will be Australia’s fourth-largest when it reaches full production.

Three of Rinehart’s four children – eldest Bianca Rinehart, Hope Welker and John Hancock – sued for control of the trust in 2011.

They alleged their mother acted with “gross dishonesty” as trustee, when she pushed out its vesting date until 2068, meaning all four children would not get their shares until they were in their 80s and 90s.

Gina Rinehart loses control of $5b family trust – by Louise Hall (Sydney Morning Herald – May 28, 2015)

May 28, 2015

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

John Hancock, the estranged son of Australia’s richest person Gina Rinehart, has won an epic legal battle over control of the family’s multibillion-dollar family trust, with his sister and ally Bianca Rinehart appointed trustee.

On Thursday, NSW Supreme Court Justice Paul Brereton appointed Bianca, 38, trustee of the Hope Margaret Hancock Trust, which was set up by her late grandfather Lang Hancock and is thought to be worth about $5 billion.

Justice Brereton also ordered Mrs Rinehart to hand up documents and accounts relating to the trust that John and Bianca had claimed were withheld from them for many years.

The decision follows a bitter and public three-and-a-half-year war that saw Mrs Rinehart and her youngest daughter, Ginia, 28, pitted against her eldest two children, John, 39 and Bianca. Hope Welker, 29, who initially launched the legal action against her mother, settled in 2013 for $45 million because of the “high degree of distress” the litigation was causing her.

Justice Brereton said: “Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so”.

New project adds some lustre to Quebec’s depressed iron market – by Robert Gibbens (Montreal Gazette – May 26, 2015)

May 27, 2015

http://montrealgazette.com/

Two iron mine closures in 2013 took a heavy toll on the Quebec-Labrador trough, but Tata Steel and partner New Millennium Iron Corp. are ramping up a new export project to hit annual capacity of 6 million tonnes next year.

The DSO (direct shipping ore) project, as it is known, is managed by Tata Steel, which also arranged the financing. It is mining high-grade iron ore (60 per cent average iron content), with the first 2 million tonnes being shipped to market directly and 4 million tonnes being upgraded in a new high-tech processing plant.

The products will move almost 600 kilometres by rail to Sept-Îles on the St. Lawrence north shore for loading into heavy ore carriers and delivery to Tata Steel furnaces in Europe and elsewhere.

The DSO Project, located well northwest of the two mothballed mines, has cost at least $560 million U.S. It has sufficient reserves for an active life of at least 15 years and will provide about 700 direct and indirect jobs. DSO has negotiated a benefits pact with the First Nations.

But Tata Steel, Europe’s second-biggest steelmaker and part of the giant Indian Tata Group conglomerate, is looking at something more ambitious: the Taconite project to develop several major iron deposits straddling the Quebec-Labrador border farther north near Schefferville.

China cash lining up for Fortescue Metals Group – by Matthew Stevens, Amanda Saunders and Julie-anne Sprague (Australian Financial Review – May 25, 2015)

May 26, 2015

http://www.afr.com/

Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment involving Fortescue Metals Group.

Australia’s third-largest iron ore producer has held discussions with China’s largest steel producer, Baosteel, and China’s largest conglomerate, CITIC, about a recapitalision to shore up its balance sheet.

It is unclear if the applications to FIRB are from CITIC or Baosteel but sources said there is interest in Fortescue from one or more companies which are Chinese or part-Chinese owned.

There are no moves to take over Fortescue. Instead, the companies are interested in buying a stake or increasing an existing stake, sources said. A deal could involve the partial selldown by the company’s founder, chairman and biggest shareholder, Andrew Forrest.

Fortescue and Baosteel already work closely. In June 2012 the two companies merged their magnetite iron ore assets in the Pilbara into a venture called FMG Iron Ore Bridge, which is 88 per cent controlled by the Perth company and 12 per cent owned by the Chinese steel giant.

Up North Report: Inside North America’s biggest construction project – by Aaron Brown (Minneapolis Star Tribune – May 25, 2015)

May 26, 2015

http://www.startribune.com/

Construction is accelerating at the long awaited $1.9 billion Essar Steel Minnesota mine near Nashwauk, while Essar now says it’s optimistic about producing direct reduced iron products here.

In a tour of the Northern Minnesota site on May 21 with Mitch Brunfelt, Essar’s assistant general counsel and director of government and public relations, I took pictures and observed progress at the site of the biggest construction project on the Mesabi Iron Range in a generation.

This is currently the largest greenfield construction project on the continent, and it’s hard to understate the sheer size, commontion, and labor involved. The site produces a steady drone, easily heard from my home eight miles away.

After years of starts and stops, Essar now says it is finally fully financed and has increased its contractor workforce at the site. About 400 workers were on site the day I visited. Brunfelt said they will soon see 600-800 workers on site each day as summer arrives in force.

Essar has officially amended its construction timeline to reflect the realities of the company’s progress. Brunfelt said Essar engineers are now eying production of taconite by late June or July of 2016.

Sweden to relocate entire city to meet China’s energy needs – by Dominic Hinde (Washington Times – May 24, 2015)

May 26, 2015

http://www.washingtontimes.com/

KIRUNA, Sweden — To feed China’s growing appetite for raw materials, this venerable mining town 90 miles north of the Arctic Circle is poised to become a cutting-edge Tomorrowland as it prepares to move buildings, residents and even a century-old wooden church to a new location a few miles away.

“These will be the first to go,” said Kjell Torma, editor of KirunaTidningen, the local newspaper, pointing to a row of red brick apartment blocks surrounded by construction fences. “If you want a cheap kitchen fan or some radiators, get in there.”

Over the next 10 years, Kiruna officials plan to demolish the apartments and most other buildings in this town of 18,000 residents and then rebuild them as far as three miles away — all part of an ambitious $375 million project to make way for the expansion of a giant iron mine as demand from China has suddenly made extraction here worth the investment.

But officials aren’t constructing an exact duplicate of Kiruna, founded in 1900 as the most northerly town in Sweden. With funding from Sweden’s state-owned mining company — Luossavaara-Kiirunavaara AB, or LKAB — officials in Kiruna aim to create one of the most environmentally friendly cities in Europe.

China Pollution War Boosts Anglo Iron Prospect 10,000 Miles Away – by Juan Pablo Spinetto (Bloomberg News – May 26, 2015)

May 26, 2015

http://www.bloomberg.com/

Anglo American Plc’s Brazilian iron foray was fraught with misfortune from billion-dollar overruns to a global glut. As the $8.4 billion mine finally ramps up, it’s catching a break from China’s greener approach to making steel.

The Minas-Rio iron-ore mine, the largest project in Anglo’s 98 years, is scheduled to reach output capacity pace by mid-2016. And while the start of operations coincides with a price rout of the steelmaking ingredient, the London-based miner is betting the higher quality of its product will help shield the venture from the malaise affecting the industry.

Minas-Rio produces pellet feed, an ultra fine type of ore containing about 68 percent iron. That allows Anglo to sell at a premium over the benchmark because steelmakers — including those in China, the biggest buyer — find it more productive and less polluting.

“China is more and more focused on the environmental impact of consuming the iron ore at the steel mills,” Andreas Bokkenheuser, an equity analyst at UBS Group AG, said by telephone from New York. “The lower silica content means they will consume more of it in the future,” he said, referring to the most common impurity.

Australia’s Scrapped Iron-Ore Inquiry Fires Up Debate Over Output – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Questions loom over who should control Australia’s natural resources: the nation, or the private companies that own and operate them

SYDNEY—The Australian government’s decision to reject an inquiry into the iron-ore market capped a tumultuous week during which a bitter debate over the industry’s relentless output expansion, despite sinking prices, has dominated the national discourse.

At the heart of the issue: whether a country’s natural resources belong to the nation, or the private companies that own and operate them.

Australia’s Prime Minister Tony Abbott earlier this month backed calls for the parliament’s economics committee to investigate claims that mining giants BHP Billiton Ltd. and Rio Tinto PLC have been driving down iron-ore prices by boosting production in a way that undermines their smaller competitors, as well as harming the country’s economy.

But in a sign of the rift within government itself over the issue, Australia’s Treasurer Joe Hockey late Thursday officially nixed any plans for an inquiry.

His decision followed an unusually outspoken campaign by the normally publicity-shy mining majors, with BHP’s Chief Executive Andrew Mackenzie saying any probe would be “a ridiculous waste of taxpayers’ money.”

Forrest fire: Twiggy’s secret bid to salvage iron ore price – by Andrew Burrell and Paul Garvey (The Australian – May 23, 2015)

May 25, 2015

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

For the second time in five years, Andrew Forrest has been comprehensively out-lobbied, out-manoeuvred and out-muscled in Canberra’s halls of power by his despised rivals BHP Billiton and Rio Tinto.

The billionaire chairman of Fortescue Metals Group is seething at being snookered again by two multinationals he believes are hellbent on pushing him out of business by driving down the iron ore price.

“This won’t be the end of it — he won’t stop now,” said a close ¬associate of Forrest’s after Joe Hockey bowed to the demands of BHP and Rio by announcing on Thursday that there would be no ¬inquiry into the iron ore market.

Another was more blunt: “He will keep going — he actually believes his own bullshit.”

Sure enough, at the crack of dawn yesterday, the indefatigable Forrest hit the national airwaves from Perth in a bid to reboot his campaign, suggesting BHP and Rio had sent “plane loads” of ¬lobbyists to Canberra in recent days to convince the government to call off the planned inquiry.

[Iron] Range Resiliency Tested Again: WE WILL PERSEVERE – by Bill Hanna (Mesabi Daily News – May 23, 2015)

May 25, 2015

http://www.virginiamn.com/

Resilient — adjective.

1. Springing back; rebounding.

2. Recovering readily from adversity or the like.

The word resilient definitely defines a strong quality of the Iron Range, its people and our No. 1 industry of mining.

The Range has had to bounce back several times from economic difficulties associated with the ore and steel industries. And we have done so repeatedly through hard work, innovation and a never-give-up attitude.

The Range’s resiliency is now being tested once again because of a downturn in the ore and steel industries brought on in a major way by illegally subsidized steel that has flooded the U.S. market and a glut of iron ore that has lowered prices for the resource.

These certainly are some tough times for mining on the Iron Range. But, once again, the resolve of the companies and people who flip the switch of the industry to make it go will persevere.

Fortescue’s Andrew Forrest maintains iron ore rage – by Paul Garvey (The Australian – May 22, 2015)

May 22, 2015

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

Fortescue Metals Group founder Andrew Forrest has vowed to continue his calls for greater scrutiny of mining giants BHP Billiton and Rio Tinto, despite the federal government’s official rejection of an inquiry into the iron ore market.

Joe Hockey yesterday declared that the inquiry — originally supported by Tony Abbott — would not go ahead, drawing an angry response from Mr Forrest.

The billionaire mining entrepreneur, who has been campaigning for months for governments to pressure BHP and Rio over their strategy to continue lifting iron ore production, said the “hysterical” lobbying of multinational mining giants caused the inquiry to stall.

In an opinion piece written for The Australian, Mr Forrest questioned what the mining giants had to fear from an inquiry.

“Those that paint me as an interventionist from behind their Singapore tax shields know the iron ore industry is an oligopoly in which the big three each wield more market power than Saudi Arabia in oil and where the barriers to entry are huge and built on decades of subsidies,” he said.

[Australia iron mining] Friends, countrymen, lend me your ores – by Richard Denniss (Brisbane Times – May 22, 2015)

May 22, 2015

http://www.brisbanetimes.com.au/

Richard Denniss is an economist and executive director of The Australia Institute.

Australia has a bigger share of the seaborne coal market than Saudi Arabia has of the world oil market. And Australia has a bigger share of the seaborne iron ore market than all of the OPEC counties combined have of the world oil market. Everyone knows that if OPEC doubled their oil supply the world oil price would fall. Yet Australians are being told that our decision to double our iron ore exports between 2007 and 2014 had no impact on the price of iron ore.

Someone is talking crap.

While it’s hard for mere mortals to turn water into wine, it’s easy to turn wine into water. Just take a glass of wine, add a very large quantity of water and, hey presto, you’ve got water. But if you add water, one drip at a time, to a glass of wine, it’s virtually impossible to decide when it stopped becoming wine and started becoming water.

So what’s watery wine got to do with the price of iron ore? Lots.

Between 2005 and 2014 Australia built or expanded almost 400 mines. Not surprisingly, doing so put enormous pressure on the cost of the labour, capital and raw materials need to build them.

Vale iron ore deal a ‘reminder’ for Australia: Roy Hill – by Tess Ingram (Sydney Morning Post – May 22, 2015)

May 22, 2015

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

Roy Hill chief executive Barry Fitzgerald has said the iron ore expansion deals Brazilian miner Vale inked with China this week are a reminder Australian producers need to remain competitive in the global iron ore market.

Mr Fitzgerald, the man responsible for the development of Gina Rinehart’s $10 billion Roy Hill mine, joined majors BHP Billiton and Rio Tinto in warning of the Brazilian iron ore producer’s growing competitiveness with its Australian rivals.

“What it does remind me, and it should remind all of us, that we in the mining industry are in a competitive, international business,” Mr Fitzgerald told a Morgans Financial breakfast in Perth on Friday. “What we do needs to reflect the pressures and the actions of our competitors.”

On Tuesday, China agreed to fund Brazilian iron ore giant Vale’s major S11D expansion and invest in huge ships that will transport high-quality ore from Brazil to Asia for a lower cost.

The project, which should be finished next year, is expected to produce 90 million tonnes of high-quality iron ore at a unit cost of $US11 a tonne. Vale also announced this month it would begin shipping a blended product – Brazilian Blend fines – with an iron content of 63 per cent.