NEWS
Iron Ore  

Rio spending $4 billion on iron ore pipeline amid China demand

Rio Tinto Group lifted its spending on new iron ore projects in Australia to more than $4 billion with the approval of a replacement mine at a key hub, providing a further sign of the industry’s confidence in demand led by China.

London-based Rio will invest $749 million to bring the Western Turner Syncline Phase 2 project into production from 2021, according to a statement Wednesday. It will help extend the life of operations around the Tom Price mine, which began exporting in 1966.

Rival BHP Group is spending about $3 billion on its South Flank mine and Fortescue Metals Group Ltd. is investing more than $3 billion in two developments

While the new project is aimed only at replacing output that’ll be lost from aging pits, Rio will have options to boost volumes from its $2.6 billion Koodaideri development, Chris Salisbury, iron ore chief executive officer, said in a phone interview. The Western Turner project was accounted for under capital expenditure guidance outlined last month, he said.

Australia’s top miners continue to see potential to leverage low production costs and a dominant position in the seaborne trade to generate strong profits from iron ore, even as they forecast China’s steel output to reach a peak.

Demand for ore is being supported by infrastructure projects in China launched earlier in 2019 and by ongoing property development, Salisbury said. There’s also been a more limited impact from the nation’s traditional winter output curbs on steel mills intended to limit pollution, he said.

“We haven’t seen significant effects of those so far in the season,” Salisbury said. “We are pleased with the level of demand at the moment.”

Rival BHP Group is spending about $3 billion on its South Flank mine and Fortescue Metals Group Ltd. is investing more than $3 billion in two developments, including the Iron Bridge project that’ll add output of higher-quality materials. Rio last year approved the Koodaideri project and also $820 million of spending for its share of work to sustain output from the Robe River joint venture.

The latest investment by Rio highlights “the ongoing commitment toward capital required to maintain existing” volumes and product quality in Australia’s Pilbara region, RBC Capital Markets analyst Paul Hissey said in a note. Potential for an iron ore surplus from 2020 and the prospect of continued slowing in China’s economy mean RBC was cautious about the market over the medium and long term, he said.

Rio forecasts its iron ore shipments to rise as much as 5% in 2020 and expects to have capacity to hit a long-standing target for annual cargoes of 360 million tons by 2022. Iron ore accounts for about 43% of its revenue.

“Our iron ore business does continue to deliver industry leading margins,” Salisbury said. The investments are “a commitment to the importance of iron ore to the overall Rio portfolio,” he said.

Rio’s investment in the Western Turner project will add a new crusher and a 13-kilometer (8-mile) long conveyor belt, trimming the need for road haulage and helping cut the mining hub’s greenhouse gas emissions, the producer said. The plan will also protect the future of the company’s flagship Pilbara Blend iron ore product. The investment means Rio’s approved spending on new iron ore projects is more than A$6 billion ($4 billion), according to Salisbury.

Comments:

Leave a Comment:

   
   
   
 

Iron ore soars as Vale ordered to shut down mines

Chinese iron ore futures surged on Monday, marking the biggest intraday percentage gain since July 2019, as supply concerns deepened after the country’s second-biggest iron ore supplier Brazil shut down Vale’s Itabira complex due to coronavirus concerns.
 

Iron ore dominates Australian resource 2018-19 profits

Australian iron ore producers accounted for the largest share of operating profits in the entire resources sector, including upstream oil and gas and coal mining, during the 2018-19 fiscal year to 30 June. The resources sector, at 8pc of the economy, accounted for more than a fifth of all industry profits.
 

The CEO of Chadormelo Mining and Industrial Company emphasized Prosperity to produce and create jobs for talented young people

Referring to the role and position of this value-creating group in the production and economy process, the CEO of Chadormelo added: "Workers are the real capital of any production and industrial unit and certainly no development will take place in production, except with the efforts of workers."
 

Odisha: Serajuddin Mine Cuts Iron Ore Lump Price by INR 500/MT

Serajuddin- Odisha's major merchant iron ore mine has decreased iron ore lump offers by INR 500/MT (USD 7) effective from today (19 May'20). As per the market participants, miner has decreased prices to INR 3,500/MT (ex-mines, including Royalty, DMF, & NMET) as against last offer of INR 4,000/MT.
 

Sierra Leone detains five expatriate managers at iron ore mine

Five expatriate employees of SL Mining, a subsidiary of London-based Gerald International Ltd., were arrested Wednesday on suspicion of instigating unrest, the mining company said in a statement Saturday.
 

Iron ore price surges on Brazil covid-19 crisis

Iron ore prices were closing in on triple digits on Wednesday as optimism about a quick recovery in China, where more than half the world’s steel is forged, combined with supply fears from Brazil, the globe’s number two supplier.
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners