Engineering & Mining Journal

OCT 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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IRON ORE OUTLOOK 52 E&MJ • OCTOBER 2018 www.e-mj.com grass mine, which was officially opened in August 2017. The Koodaideri project aims to sustain the quality and tonnage of the company's Pilbara blend product. BHP continues to develop the South Flank mines, which will sustain produc- tion levels of the company and also raise the average iron grade from 61% to 62%, and the overall proportion of lump from 25% to approximately 35%. The mine that could start production sometime af- ter 2020 has seen revisions of its costs as estimates are being shifted upward. The Roy Hill iron ore mine in Australia is close to reaching its full capacity at 55 million mt/y. For the financial year ended June 2018, sales from the mine were about 33 million mt. Fortescue Metals Group ap- proved the $1.3 billion Eliwana project in May 2018. The project will increase the average grade of Fortescue products from a 58.5% grade to around 60% grade. The Timir joint venture between Evraz and Alrosa in Russia is completing the first $180 million stage with a capacity of 3 million mt/y. The project will reach full capacity in 2018. A second phase could expand capacity to 6 million mt/y at a cost of $380 million. The new Chinese owner of the Tonkolili mine in Sierra Le- one, Shandong, is investing $700 million to restart the mothballed operation. Corporate Concentration Corporate concentration in the iron ore industry has remained at a constant level in 2017 after a period of increase from 2014-2016. The earlier trend of decreas- ing concentration, due to swift produc- tion increases by many small- and medi- um-sized producers not utilizing their full capacity, during the 2005-2008 period, was reversed in 2009. At that time, the major producers got their large expansion programs up and running. Since then, in- dustry concentration has increased slowly but steadily. But the increase stopped in 2017, when the 10 biggest producers ac- counted for 62.9% of global production compared to 62.7% in 2016. The "Big 3" iron ore mining companies (Vale, Rio Tin- to and BHP) have steadily increased their control over total world iron ore production from 40% in 2016 to 41.9% in 2017. Vale, the Brazilian giant mining com- pany, remains the world's largest iron ore producer, with 367 million mt of iron ore production in 2017, up from 349 million mt in 2016, a new all-time high. After mar- ginal growth in 2016, partly due to the Sa- marco dam failure, new production capaci- ty at the S11D project in Carajas has come on stream. All of Vale's mines are located in Brazil and its market share rose from 16.4% in 2016 to 16.8% in 2017. This is down from its peak share of 18.8% in 2007. Rio Tinto has been the second larg- est producer since 2016, when it overtook BHP and regained its traditional second rank, which it had always held until 2013. Rio produced 283 million mt in 2017, up marginally from 281 million mt in the previous year. It controls a market share of 13.4%, a slight decline since 2016. Rio Tinto has most of its mines in the Pilbara region in Australia, and icontrols the Iron Ore Co. of Canada (IOC) with mines in Lab- rador. BHP managed to keep its market share at 12.3% as production increased by 6 million mt to reach 268 million mt in 2017. Except for the Samarco joint venture LESS DOWNTIME IS MORE UPTIME with CleanScrape ® Belt Cleaner LESS IS MORE WITH CLEANSCRAPE ® BELT CLEANER. Less Blade Replacements / More Blade Life – lasts up to 4x as long as traditional cleaners Less Maintenance / More Performance – only one tensioner adjustment ever /HVV&RQFHUQ0RUH&RQ¿GHQFH – safe for vulcanized and mechanical splices visit martin-eng.com 800.544.2947 / 309.852.2384 cleanscrape@martin-eng.com ® Registered trademark of Martin Engineering Company in the US and other select locations. © 2018 Martin Engineering Company. Additional information can be obtained at www.martin-eng.com/trademarks and www.martin-eng.com/patents. A GLOBAL FAMILY

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