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Posts tagged ‘iron’

June 17th, 2016

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A tale of two gluts: Oil and ore approach $50 on opposite paths NAI 500

October 10th, 2014

Canadian iron ore CEO accuses Rio Tinto of predatory tactics Stockhouse
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David Morgan’s secret to being grateful, even at $17 silver Streetwise Reports
How important is a social licence to operate? Geology for Investors
600 million reasons to keep your eyes on India VantageWire
Video: Flinders CEO discusses new graphite mine, Big North acquisition Industrial Minerals
The last resort when monetary policy fails Equedia

Iron ore price lifted by strong Chinese steel growth

November 20th, 2013

by Frik Els | November 20, 2013 | Reprinted by permission of

Iron ore price lifted by strong Chinese steel growth

Hong Kong construction workers on bamboo scaffolding 18 floors up. (Photo: ttstam, Fotopedia)


Global steel production rose 6.6% in October compared to output a year ago, with China again setting the pace for overall output, World Steel Association data showed on November 20.

Steel production is a key indicator of activity in global industry and iron ore, the key steelmaking ingredient, is the second most-traded commodity around the world behind crude oil.

China, which produces almost as much steel as the rest of the world combined, recorded growth of 9.2% in October to 65.1 million tonnes compared to last year, while global number two Japan’s production was up 7.7% to 9.5 million tonnes.

World Steel Association data also showed healthy growth outside Asia with U.S. production jumping 8.7% to 7.4 million tonnes and European Union production up 4%, led by a surprising 23.9% output boost in Spain and a 17.9% increase in Britain.

The liberalization of China’s hukou system is expected to be a main driver of a fresh wave of urbanization inside the country of 1.3 billion people.

China’s Iron and Steel Association released data November 19 showing the country’s daily crude steel output for the first 10 days of November rose a further 2.18% from the already torrid pace of late October.

The daily run rate for Chinese blast furnaces is now 2.144 million tonnes and the increase in output follows a rally in steel prices prompted by reforms announced at the Chinese Congress Third Plenum policy meetings.

Amid other market-friendly reforms, the liberalization of China’s hukou system is expected to be a main driver of a fresh wave of urbanization inside the country of 1.3 billion people.

Under China’s 4,000-year-old hukou system, people are registered in their town of birth and can only access government services including education, housing and welfare there.

This led to millions of migrant labourers and especially their children in large cities becoming an underclass without ways to put down roots.

The strength in the global steel industry has offset some of the price pressures brought on by increased supply of the main raw materials for blast furnaces.

The price of iron ore has held up well despite record-setting exports from Australia and a looming flood of new supply through 2017.

The benchmark CFR import price of 62% iron ore fines at the Chinese port of Tianjin climbed to $136.40 a tonne on November 20, up 23% from its lows for the year struck at the end of May, according to data provided by Steel Index.

The price of metallurgical coal has recovered from steep declines during the first half of 2013 but remains relatively soft.

Benchmark Australian premium coking coal was changing hands for $143 a tonne on November 20, up from multi-year lows of $131 struck in early July, but down 2.5% so far in November.

Reprinted by permission of

Frontier prudence

July 2nd, 2013

Champion Iron Mines steps back from its Labrador Trough rail proposal

by Greg Klein

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Another transportation setback has highlighted the challenges of reaching Canada’s resource-rich hinterlands. Champion Iron Mines TSX:CHM announced July 2 it had terminated an agreement to use facilities at the deep-sea port of Sept-Iles, Quebec. The decision saved the company a $25.6-million payment due to the port by July 1. But it places further uncertainty on transportation proposals to the Labrador Trough straddling northern Quebec and Labrador. The news followed a June 12 announcement that Cliffs Natural Resources was suspending its Ontario chromite project and, along with it, a province-backed road proposal for the Ring of Fire. In February CN TSX:CNR stated it had suspended its feasibility study on an estimated $5-billion, 800-kilometre Quebec rail line to the Trough.

Champion attributed its decision to a failure to gain private and public backing for a new railway. Estimated at $1.33 billion in the company’s February pre-feasibility report for the Consolidated Fire Lake North iron ore project, the 310-kilometre line would connect the southern Trough with Sept-Isles, on the St. Lawrence River’s north shore. The company studied the project despite the fact that Champion had already signed a collaboration framework agreement backing CN’s proposal.

Champion Iron Mines steps back from its Labrador Trough rail proposal

One of two existing railways in the Trough, the Quebec North Shore
and Labrador line runs a 418-kilometre route between
Labrador City and Sept-Isles.

Champion reverted to Plan A following CN’s February decision. Discussions resumed with private and public interests to finance, build and operate a multi-user railway. But they failed to make progress by the July 1 payment deadline.

Of course market conditions played their role. Iron ore prices have been falling since a February high of about $154 per dry metric tonne. The following month the Melbourne Herald Sun reported that Rio Tinto chief economist Vivek Tulpule expected prices to fall to nearly $100 by September 2014. On June 24, however, Platts quoted Macquarie bank analysts who spoke of a potential recovery later this year. A July 2 report from China’s Xinhua news service stated, “Although there might be fluctuations, prices of iron ore imports will see a falling trend in the longer term.”

“The past year has been a very challenging period for iron ore developers,” conceded Champion president/CEO Tom Larsen in his July 2 statement. But he emphasized the company remains committed to its flagship and to “securing transportation and port-handling services that will permit the company to place among the lowest-cost iron producers in the Labrador Trough.”

Even without Champion’s proposed railway, the region benefits from mines, plants, power and two existing rail lines. The Iron Ore Company of Canada owns and operates the Quebec North Shore and Labrador route, which connects its Labrador City facility in the southern Trough to Sept-Isles, 418 kilometres away. As a common carrier, the QNSL is required to ship other companies’ goods as well.

An ArcelorMittal subsidiary runs a private carrier called the Cartier Railway from the company’s Mont-Wright operation, 40 kilometres southwest of Labrador City, to Sept-Isles.

Iron ore prices notwithstanding, Asian investment in the Trough has continued. Chinese companies are said to be looking at Rio’s 58.7% interest in the Iron Ore Company of Canada, of which Mitsubishi holds another 26.2%. The Anglo-Australian giant reportedly wants to sell its stake for up to $4 billion.

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Which way to the Ring of Fire?

June 13th, 2013

As Cliffs stands down, Noront and KWG propose alternate transport routes

by Greg Klein

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As Cliffs stands down, Noront and KWG propose alternate transport routes

Left: KWG Resources’ rail proposal. Right: A north-south route from the
Eagle’s Nest vicinity shows Cliffs’ road proposal, while Noront’s plan veers southwest.


It’s a suspension, not a cancellation. Yet the June 12 announcement from Cliffs Natural Resources dumped cold water all over Ontario’s Ring of Fire. By putting the region’s largest project on hold, the company has also shelved plans for an all-weather road to the south, a vital link some other companies were counting on to develop the McFaulds Lake area about 540 kilometres northeast of Thunder Bay. But Noront Resources TSXV:NOT quickly responded that its own projects are “still good to go” thanks to a proposed east-west road. Not to be outdone, KWG Resources TSXV:KWG pursues the feasibility of north-south rail.

Seemingly a Plan B, Noront’s east-west corridor was actually the company’s first idea. It would link the Eagle’s Nest project to Highway 808, roughly 230 kilometres southwest. But in May 2012, the Ontario government conditionally agreed to help finance the north-south route, part of Cliffs’ $3.3-billion proposal to build the Black Thor mine with road access to a new processing facility near Sudbury. On that basis, Noront used the north-south route in the base case for the September 2012 Eagle’s Nest feasibility study. Noront retained the east-west route as back-up.

A mining and exploration retrospect

Northern Ontario’s muskeg poses development challenges, as this photo from Noront Resources shows.

Prudently, it now seems. Explaining the suspension of what would have been North America’s first major chromite mine, Cliffs’ senior vice-president of global ferroalloys Bill Boor said, “Certain critical elements of the project’s future are not solely within our control and require the active support and participation by other interested parties such as government agencies and impacted first nation communities.”

Reacting to Cliffs’ suspension, Noront chairman/interim CEO Paul Parisotto said his company’s east-west proposal “balances first nations objectives, the environment and job growth. We’re confident this alternative will be attractive to each level of government, the local communities and the people who will benefit from this sensible approach.”

The route would upgrade an existing winter road to all-weather status. Among its advantages, it “avoids provincial parks, avoids areas of special interest to aboriginal groups and provides the greatest benefit to first nation communities,” the feasibility report stated. The native bands are currently served by air travel and winter road.

With Cliffs temporarily out of action, Noront emerges as the regional bigshot. Its Eagle’s Nest project achieved feasibility last September, using an 8% discount rate to calculate an after-tax net present value of $543 million and a 28% internal rate of return. With initial capital costs of $160 million, payback would come after three years of the 11-year mine life for a project showing:

  • proven reserves of 5.26 million tonnes averaging 2.02% nickel, 1.04% copper, 1.01 grams per tonne platinum, 3.45 g/t palladium and 0.19 g/t gold
  • probable reserves of 5.87 million tonnes averaging 1.38% nickel, 0.72% copper, 0.78 g/t platinum, 2.76 g/t palladium and 0.18 g/t gold.

Less than two kilometres away, the company’s Blackbird project has a March 2012 resource showing:

  • a measured category of 9.29 million tonnes averaging 37.44% chromite with a chromium-to-iron ratio of 2
  • an indicated category of 11.17 million tonnes averaging 34.36% with a Cr:Fe ratio of 1.95
  • an inferred category of 23.48 million tonnes averaging 33.14% with a Cr:Fe ratio of 1.97.

Noront PR rep Janice Mandel tells ResourceClips two levels of government know about the company’s east-west proposal. “Noront’s been talking to the provincial government and the federal government, and the environmental assessment has been underway for a while, so there have been lots of discussions. But [Ontario’s] formal proposal had been made with Cliffs.”

She added that Goldcorp TSX:G has shown interest in Noront’s proposal as a route for transmission infrastructure. The major’s fly-in/fly-out Musselwhite mine lies roughly 130 kilometres southwest of Eagle’s Nest and Blackbird.

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Week in review

October 19th, 2012

A mining and exploration retrospect for October 13 to 19, 2012

by Greg Klein

Unhappy birthday. Many unhappy returns

With Friday marking Black Monday’s 25th anniversary, pundits around the world reflected on the calamity, its causes and whether it helped set off the financial crises that followed. Among the not-reassuring news for the future was this headline from Thursday’s Der Spiegel: “Euro Exit by Southern Nations Could Cost 17 Trillion Euros.”

Referring to a study by an economic research group called Prognos, the German weekly stated, “The researchers arrived at a particularly bleak assessment because they didn’t just calculate the losses of creditors who had lent money to the crisis-hit nations. They also analysed the possible impact of a euro collapse on economic growth in the 42 most important industrial and emerging economies that make up more than 90% of the world economy.”

Prognos predicated that result on a chain reaction set off by Greece reverting to the drachma. But keeping Greece also has its costs, as another headline from Thursday’s Der Spiegel stated: “Corruption Continues Virtually Unchecked in Greece.”

Chinese companies bring Canada investment, skills, controversy

Revelations continued this week about a plan by Chinese interests to import Chinese workers to staff four proposed British Columbia coal mines. The first 200 are expected to arrive any time now, with possibly 2,000 more to come.

A mining and exploration retrospect for October 13 to 19, 2012

On Monday Mark Olsen, President of the Bargaining Council of B.C. Building Trade Unions, called the plan “simply a strategy to employ lower-paid workers who are compliant with the culture of coal mining in China … a culture which leads them to accept the possibility of death as a cost of having a job.”

Also on Monday, Vancouver Sun columnist Daphne Bramham noted that the workers will be “indentured” to one employer, “dependent on staying in the company’s good graces in order to hold their jobs [and] in a remote area fully reliant on [their employer] for help in getting housing, health care and ensuring their safety.”

The companies’ rationale was partly based on insufficient response to job ads posted in Canada. But another story in Monday’s Vancouver Sun stated that the ads offered wages far below Canadian standards. “Chances are they won’t find an underground miner (in Canada) who will work for $25 an hour,” said the manager of one mining personnel agency. “I mean, they’re putting their lives at risk.”

Additionally, Olsen stated that neither the federal nor provincial government “has a mechanism in place to verify the wages these foreign workers actually receive.”

More news hit the fan on Tuesday when the United Steelworkers revealed that at least four of those Canadian job ads, for approximately 70 positions, required applicants to speak Mandarin.

According to a Tuesday Vancouver Province column by Michael Smyth, B.C. Minister of Jobs, Tourism and Skills Training Pat Bell claimed, “This is a unique situation for the next six to eight months. Once those mines go into full production, I expect those jobs will be filled by British Columbians first and Canadians second.”

On October 11, however, HD Mining International spokesperson Jody Shimkus told ResourceClips that the first of the four proposals, the Murray River Project, will probably rely on Chinese underground workers for 10 years after its projected 2015 start date.

On Thursday a labour-sponsored online journal called the Tyee stated that two companies recruiting miners in China were charging exorbitant fees. A reporter who responded to ads on a Chinese Web site was told applicants pay about $4,700 in advance, approximately two and a half years’ salary for a Chinese miner. Once working in Canada, the miner would pay another $7,800 in $400 monthly instalments.

The fees are illegal in B.C. The wages offered by the recruiter were $22 to $25 an hour, the Tyee stated, below the minimum $25 that the company claimed in Canadian job ads.

But two solid weeks of wide-ranging controversy haven’t stopped Canadian Dehua International Mining Inc from picking up another acquisition. On Friday Lions Gate Metals TSXV:LGM announced a $15-million LOI in which Canadian Dehua may option 100% of the 77,705-hectare Poplar Copper-Gold-Silver Project in west-central B.C. The agreement is subject to shareholder and regulatory approval.

A big-time B.C. operator Canadian Dehua may be, but its Web site reads like a parody of broken English. Here’s just one example, about the Murray River Project:

Proved and inferred reserves the coal seam area is 17 square kilometers.

That would be an especially interesting use of NI 43-101-ish terminology were the Vancouver-headquartered company a reporting issuer in any Canadian jurisdiction. B.C. Securities Commission spokesperson Richard Gilhooley would only tell ResourceClips that Canadian Dehua is “not currently listed on SEDAR, which is where issuers typically are.”

Plan Nord not dead, just modified

Following dismissive comments by her mining minister, Quebec Premier Pauline Marois saw fit to reassure French investors that Plan Nord will go ahead after all. Prior to the province’s September 4 election, Marois had spoken of altering the former government’s proposed $2.1-billion in public funding for an infrastructure program. On October 1 La Press reported that Quebec Natural Resources Minister Martine Ouellet said Plan Nord was merely a “marketing” strategy for projects that were already underway or in planning. But on Wednesday the Nunatsiaq News reported that a modified Plan Nord “could involve companies chipping in financially or giving Quebec shares if Quebec built a road or a port in northern Quebec, and the company benefitted from this infrastructure. These changes will be made ‘in the coming months,’ Marois said. ‘But we remain focused on the development of the North.’”

Iron ore an indulgence or a strategic asset?

In a Thursday story picked up by media including the Globe and Mail, the Financial Times reported that the world’s largest steelmaker is considering selling a chunk of its Canadian assets. Sources told the FT that ArcelorMittal might put 30% of its Canadian operations, which total some $8 billion to $10 billion, up for grabs.

ArcelorMittal Mines Canada produces about 15 million tonnes of iron ore concentrate and 9 million tonnes of iron oxide pellets annually, accounting for approximately 60% of Canada’s total production. The company’s Mont-Wright and Fire Lake mines in Quebec’s Labrador Trough region were slated for $2.1 billion in upgrades by 2013. But according to the FT, “One sector specialist described ownership of iron ore assets as an ‘indulgence’ in the current environment.”

Iron ore prices plummeted in August due to a situation in China variously described as over-supply, slumping demand or a buyers’ strike. China is the world’s largest importer of iron ore.

In July 2011 Forbes reported China’s intention to “break the grip” of its three main suppliers, Vale, Rio Tinto and BHP Billiton, which together provide 62% of China’s imports. Li Xinchuang, Deputy Secretary-General of the China Iron & Steel Association, told media his country should get more than half its supply from Chinese-invested mines overseas.

The FT stated that “Chinese companies and commodities trading houses had expressed an interest” in ArcelorMittal’s Canadian operations.

South Africa updates

Junk status looms for AngloGold Ashanti and Gold Fields as Standard & Poor’s considers lowering the companies’ debt ratings, Bloomberg reported on Thursday.

On Friday provided another weekly update of 12 major companies operating in South Africa.

[The plan to staff Canadian mines with Chinese workers is] simply a strategy to employ lower-paid workers who are compliant with the culture of coal mining in China … a culture which leads them to accept the possibility of death as a cost of having a job.—Mark Olsen, President of the Bargaining Council of B.C. Building Trade Unions

E-Caddy shows EV commitment

The bankruptcy of an e-car battery manufacturer reported on Tuesday might have reflected negatively on prospects for graphite and lithium, not to mention the environment. But the same day General Motors got a jolt of publicity for its 2013 electric Cadillac.

Battery builder A123 Systems filed for bankruptcy protection after a US$249.1-million government grant failed to save the company. In a Tuesday press release A123 stated that Johnson Controls plans to acquire A123’s automotive business assets in a $125-million transaction.

GM’s new model shows an EV commitment despite disappointing sales for its better-known Chevy Volt. Sales never lived up to the company’s initial expectations, although steep discounts have more recently given it the middling distinction of “outselling about half of all cars marketed in the U.S.

American projections are just part of a much bigger market. According to a TechSci research report published in August, the “global electric vehicle industry clocked a turnover close to US$54 billion in 2011, while electric two-wheelers became the dominating vehicle category for the whole segment.” The study predicts “phenomenal” EV demand worldwide due to “overall consumer spending, growth in population, increasing demand for environment-friendly vehicles and growing government support.”

They seek safe haven

“Forget gold: Here’s where die-hard skeptics are stashing their wealth,” declared Tuesday’s Financial Post. High yellow metal prices have pushed some discerning pessimists into a range of commodities, collectibles and other presumably secure assets.

Scandinavian and Canadian bonds are proving popular, as are rare coins, stamps and watches. Farmland offers obvious practical value. The finer things in life, from art to liquor, might also bring security. The same might be said, with far more chilling connotations, for guns and ammo. But the FP conceded that its list isn’t exhaustive. That might explain why it didn’t include canned food.

Tsodilo reports Botswana Iron Assays including 40% over 79m

May 10th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningTsodilo Resources Limited TSXV:TSD announced assays from its Xaudum Magnetite Project in Botswana. Results include

32.7% iron over 27 metres
40.4% over 46 metres
45.1% over 21 metres
34.7% over 41 metres
39.3% over 74 metres
43.6% over 37 metres
40.7% over 37 metres
34.9% over 28 metres
38.8% over 28 metres
38.8% over 22 metres
37% over 25 metres
37.3% over 42 metres
40% over 79 metres
47.5% over 34 metres

Over the next four months Tsodilo will continue drilling the Xaudum Ironstones to outline the extent of the deposit.

View Company Profile

James M. Bruchs

or Mike de Wit

by Ted Niles

Rogue Iron reports Ontario Iron Assays of 34.3% over 373.5m

May 8th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningRogue Iron Ore Corp TSXV:RRS announced assays from its Radio Hill Iron Ore Project in Ontario. Results include

46.7% total iron over 20.4 metres
34.3% over 373.5 metres
40.9% over 132 metres
39.4% over 84 metres
37.4% over 207.3 metres
38% over 30 metres
44.4% over 98.6 metres

President/CEO Stephen de Jong stated, “Results continue to show the potential of high-grade iron zones at Radio Hill and how they may affect the overall resource. Metallurgical testing and ore characterization now underway will help explain the varying grades of taconite mineralization and how they may affect future production scenarios. The high-grade material at depth is important as historical resource definition did not sufficiently define the deeper portion of the iron formation.”

View Company Profile

Mike McCormick
Investor Relations

by Ted Niles

Fancamp reports Ontario Results of 28.6% Total Iron or 40.9% Iron Oxide over 422m

April 30th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningFancamp Exploration Ltd TSXV:FNC announced results from its Desolation Lake Project in northern Ontario. Highlights include

28.6% total iron or 40.9% iron oxide over 422 metres
(including 32.6% total iron or 46.6% iron oxide over 102 metres)
33.8% total iron or 48.3% iron oxide over 26 metres

Desolation Lake is owned 80% by Fancamp and 20% by the Sheridan Platinum Group and is located in the James Bay Lowlands. The property was staked to cover a large magnetic anomaly covered by an estimated of 300 to 400 metres of Paleozoic limestone and is situated at the intersection of regional structural lineaments.

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Peter H. Smith

by Greg Klein

Rogue reports Ontario Iron Ore Assays as high as 42% over 171.1m

February 13th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningRogue Iron Ore Corp TSXV:RRS announced drill results from its Radio Hill iron ore project in Ontario. Assays include

46.65% iron over 54 metres
40.47% over 29 metres
43.45% over 32.3 metres
47.32% over 17.1 metres
46.16% over 41.3 metres
42.11% over 26.6 metres
36.47% over 45 metres
44.74% over 19.6 metres
37.89% over 164.1 metres
43.17% over 12.6 metres
46.08% over 57 metres
40.82% over 48.2 metres
42.15% over 171.1 metres

President Stephen de Jong remarked, “We continue to be pleased by the robust grades and widths early in the first phase of our drill program. These results have given us a good indication of the southern limit of the Radio Hill iron formation. We are now focusing on the central portion where iron mineralization is known to have been thickened by folding. This should have a positive impact on our results and suggests the potential for even greater widths. Given the infrastructure advantages we have with rail, power and a highway in the immediate vicinity these results are even more impressive and demonstrate the high potential of developing a strong project.”

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Stephen de Jong

by Ted Niles