Rinehart’s Hancock weighs $3.3 billion iron ore mine project
Hancock acquired a 51% interest in the Mt Bevan project from Legacy Iron Ore Ltd. and Hawthorn Resources.
– Mining giant Vale is looking at expanding its flagship iron ore project in Brazil, a company official said, hoping to cash in on a growing appetite for higher-grade varieties of the commodity in its top market China.
China, the world’s biggest consumer of the steelmaking ingredient, has ramped up buying of higher-quality, less polluting grades of iron ore as it battles to clear its notoriously smoggy skies.
Peter Poppinga, executive director at Vale, said at an industry conference in China that the world’s largest iron ore miner was studying expanding its S11D project in the Amazonian state of Para, even though it was still being brought up to the planned capacity after it was inaugurated in December 2016.
Vale is aiming to keep its total production at around 400 million tonnes, replacing low-quality iron ore with higher-grade material.
“Given all these quality trends (that are) favourable to us, we are studying to increase the project, but there are no numbers yet,” Poppinga said.
Heavy spending on the project, which churns out rich grades of ore, has driven up Vale’s debt, coinciding with a sharp slide in iron ore prices.
Poppinga said S11D’s iron ore output would be close to 90 million tonnes next year, up from around 60 million tonnes now.
However, he said Vale is aiming to keep its total production at around 400 million tonnes, replacing low-quality iron ore with higher-grade material.
“We think this is a healthy level going forward when you think about margin optimisation,” Poppinga said.
“We are not after market share, we are after value and not after volume.”
Poppinga said he expects almost 90 percent of Chinese steel capacity will comply with new emission standards by 2025.
FORTESCUE, ROY HILL
Fortescue Metals Group, the world’s fourth-largest iron ore producer, is aiming to start producing higher-grade iron ore as well from December as it addresses the widening discount for its lower grade material.
The Australian miner expects to start shipping from December a 60-percent iron content product called West Pilbara Fines, ahead of the development of its Eliwana mine and rail project.
Initial production volume of West Pilbara Fines would be 10 million to 15 million tonnes a year, Fortescue Chief Executive Elizabeth Gaines told Reuters at the conference.
“Once we have Eliwana we can continue to produce West Pilbara Fines at rates of around 40 million tonnes per annum,” Gaines said.
Fellow Australian miner Roy Hill, controlled by billionaire Gina Rinehart, which produces above 60-percent grade iron ore, also plans to raise its annual output to 60 million tonnes, from 55 million tonnes, its chief executive said.
(Reporting by Manolo Serapio Jr. and Muyu Xu; Editing by Joseph Radford and Tom Hogue)
