Iron ore exports to China up at Australia's Port Hedland

Sun Mar 4, 2012

SYDNEY, March 4 (Reuters) - Iron ore shipments to China through Australia's Port Hedland rose modestly in February compared with January, according to data released by the port authority, suggesting steady demand from the world's largest steel industry after signs of a weak start to 2012.

A cloudy outlook for steel demand curbed China's appetite for iron ore recently as mills opted to run down inventories instead of booking new orders, according to commodities traders.

But in recent weeks signs have emerged that steel mills were back in the market, albeit cautiously.

Iron ore with 62 percent iron content was up 0.1 percent to $143.20 a tonne as of late last week, according to Steel Index, matching a level last seen on Feb. 8.

February shipments of iron ore to China via the port totalled 14.58 million tonnes, after falling 15 percent in January to 14.0 million from December, according to port figures.

South Korea was a distant second, importing 2.65 million tonnes in February, the data showed.

Total iron ore shipments from the port in February rose to 19.58 million tonnes versus 17.4 million tonnes in January, according to the data.

BHP Billiton is the port's biggest user, followed by Fortescue Metals Group Ltd. Both companies ship the bulk of their ore to China.

(sourced Reuters)

Iron ore price to stay soft

Thursday, 23 February 2012

The record iron ore prices seen in 2011 are unlikely to be matched over the next six months, according to Pilbara exporters.Despite topping $US180 a tonne last year, the benchmark iron ore price has traded around $US140 a tonne in recent months, and BC Iron spokesman Morgan Ball said it was likely to stay there until midyear at least.''We are anticipating it will stay around that over the next six months,'' he said.

BC Iron is a junior exporter but is closely linked to Fortescue Metals Group through its 50-50 Nullagine joint venture, and Fortescue takes responsibility for selling BC Iron's product. Mr Ball's sentiments were matched by Sam Walsh, the boss of Australia's biggest iron ore exporter Rio Tinto.

Mr Walsh said there was still an ''element of softness'' in the iron price and the performance of the Chinese steel mills that buy most of Australia's ore. ''We believe we will go through a period of uncertainty probably in the first six months of this year, with volatility, but then we see some smoother sailing after that,'' he said. Mr Walsh said it was too early to know if the global iron ore price would be affected by a new tax imposed by the Chinese government on its domestic iron ore producers.

Reports on Friday suggested that China would raise its standard levy on Chinese iron ore producers from 60 per cent to 80 per cent in a bid to hamper marginal producers of the commodity. Mr Walsh said the move appeared to be aimed at reining in small Chinese producers of dubious environmental credentials and he did not believe it would dramatically affect the big Australian producers.
''I'm not expecting a huge impact, but time will tell,'' he said.

''It's an interesting development, a lot of people worry about whether China gets the message in relation to the environment, but they absolutely do.'' BC Iron has been exporting iron ore for almost a year and yesterday returned its first operating profit, of $5.5 million for the six months to December 31. BC Iron expects to export 3.5 million tonnes for the year to June 30, 2012.
(sourced Brisbane Times)

Odds of rain in Australia iron belt rise - Bureau

Sunday, 22 Jan 2012

Reuters quoted the Australian Bureau of Meteorology said Australia coastal Pilbara iron belt, a cyclone prone region where two thirds of the world traded iron ore is shipped, should expect above-average rainfall over the next three months.

It said 60% to 75% chance of above average rainfall existed over parts Western Australia State which includes the Pilbara.

Iron ore exports from the Pilbara were brought to a stand still last week when Tropical Cyclone Heidi swept across coastal communities dumping up to 250 mm of rain and temporarily halting the port operations of Rio Tinto RIO, BHP Billiton and Fortescue Metals Group.

Heavy rains alone do not typically affect port loadings, though inland mine pits and rail lines leading to the coast run the risk of flood damage.

Heidi temporarily shut export terminals in the town of Port Hedland, where around 20 million tonnes of ore is shipped monthly mostly from BHP and Fortescue mines.

Such odds for rainfall set out by meteorologists mean that for every 10 years with similar ocean patterns to those currently being observed about six or seven years would be wetter than average.

(Sourced from Reuters)

FMG considers magnetite joint venture

Thu, 19 Jan 2012

It is reported that Fortescue Metals Group is considering developing its North Star magnetite iron ore project in Western Australia as a joint venture.

Fortescue last year indicated that it may spin off its magnetite iron ore assets because it was focused on easier-to-produce hematite iron ore.

However, on Monday the company said it saw potential value in developing its magnetite interests as joint ventures.

The miner said it was evaluating options to partner with third parties at its North Star magnetite project, which was adjacent to the company's Glacier Valley magnetite iron ore joint venture with Chinese steel maker Baosteel.

Fortescue said in a statement that any development of North Star would be on a non-recourse basis to Fortescue balance sheet

The company also announced a 72% increase in the resource estimate for its North Star magnetite project, 100 kilometres south of its Port Hedland operation to 2.12 billion tonnes.

Of that total, 1.3 billion tonnes is in the inferred category of Australia mineral reporting code which is the least proved up category.

Just over 100 million tonnes is in the top category and measured.

(Sourced from news.ninemsn.com.au)

FMG ships record amount of iron ore in Oct Dec quarter

Tuesday, 17 Jan 2012

AAP reported that Miner Fortescue Metals shipped a record 14.77 million tonnes of iron ore in the December quarter.

Australia's third largest iron ore producer increased the amount of total shipped tonnes by 19 per cent from 12.2 million tonnes in the September quarter.

The amount of ore mined in the three months to the end of December was 16.01 million tonnes, up one per cent from the September quarter.

Fortescue planned to sustain a 55 million tonne a year run rate during the March quarter, the company said in a statement.

(Sourced from AAP)

Iron Ore-Spot at 7-week top, Australian miners suspend loading

Wed Jan 11, 2012
* Rio, Fortescue suspend loading ops ahead of cyclone
* China iron ore demand seen rising after Lunar holiday

SINGAPORE, Jan 11 (Reuters) - Spot iron ore prices rose to seven-week highs, spurred by Chinese steel mills building inventories ahead of the Lunar New Year break later this month and expectations prices may climb further after the holiday.News of supply disruption from top iron ore exporter Australia, where miners Rio Tinto and Fortescue Metals Group have suspended loading operations ahead of a cyclone bearing down on the west coast, should also support prices.

Iron ore with 62 percent iron content gained 1.6 percent to $142.30 a tonne on Tuesday, cost and freight delivered to China, its highest since Nov. 23, according to Steel Index .IO62-CNI=SI.
The Australian supply disruption may cause a "near-term tightness in supply", said Rory MacDonald, iron ore broker at Freight Investor Services. But given a lacklustre steel market in China, the world's biggest iron ore buyer, MacDonald saw limited impact on the supply-demand balance from the closure of some of the world's largest iron ore ports in Australia."Whether we see prices gain significantly because of this is another thing altogether, but I don't think it's necessarily going to drive us into another upward cycle that we wouldn't be entering into anyway post-Chinese New Year holiday.

"If it's fairly minimal, then they'll be back on track in 48 hours or so, but if it repeats then obviously we're talking about a different scenario, but we'll have to wait and see," he said.
Traders are relatively upbeat about China's iron ore demand after the week-long holiday that starts Jan. 23, with construction activity seen picking up and on expectations the government will loosen monetary policy to boost the economy. The construction sector accounts for around half of steel demand in China. Iron ore touched a 2011 peak of $191.90 a tonne in mid-February in a rally following last year's Chinese New Year.

"Even as Chinese mills wind down buying activity ahead of Chinese New Year, traders are increasingly taking positions with a view that demand will increase following the New Year holidays in February, and on an expectation that more Chinese policy loosening will be delivered in the next quarter or two,"
Commonwealth Bank of Australia said in a note.

Several cargoes of Australian iron ore fines were sold on Tuesday at levels slightly higher than previous deals, surpassing expectations of many participants, Steel Index said. Rio Tinto sold 61.4-percent grade Pilbara fines at around $141.50 a tonne, while BHP Billiton sold 61-grade MAC fines also at $141.50, traders said. BHP also sold 62.7-grade Newman iron ore fines at $145.50 a tonne, traders said.

Shanghai rebar futures and iron ore indexes at 0744 GMT
Contract Change Pct Change
SHANGHAI REBAR* 4224 9.00 0.21
PLATTS 62 PCT INDEX 143.5 0.50 0.34
THE STEEL INDEX 62 PCT INDEX 142.3 2.30 1.64
METAL BULLETIN INDEX 141.42 0.71 0.50

*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day.

(sourced Reuters)

Port Hedland iron ore shipments rise 9pct in December

Tuesday, 10 Jan 2012

Dow Jones quoted data released by the Port Hedland Port Authority showed that iron ore shipments from Australia Port Hedland rose to 21.4 million tonnes in December an increase of 8.6% from 19.7 million tons in November.

Shipments to China rose to 16.6 million tons in December up by 12.9% from 14.7 million tons from November.

Port Hedland is BHP Billiton main Australian iron ore port. Smaller miners Fortescue Metals Group and Atlas Iron also use it.

(Sourced from Dow Jones)

Australian iron ore mine magnate leads fight against tax

Thu Nov 3, 2011

* Small Australian miners plea for mine tax changes
* Small miners say global miners will pay nothing
* Treasurer says big miners pay the most

CANBERRA, Nov 3 (Reuters) - A delegation of small- and mid-sized Australian mining company executives on Thursday called on Prime Minister Julia Gillard to abandon a proposed mining profits tax, saying the biggest firms would pay nothing and leave smaller ones to shoulder the burden.

The claim was immediately rejected by Treasurer Wayne Swan before the Australian Parliament.

Gillard earlier this year vowed to introduce a 30 percent tax on profits from iron ore and coal mining after holding closed-door negotiations with the nation's three biggest mining houses, BHP Billiton , Rio Tinto and Xstrata .

At the time, Gillard estimated the three companies would account for upwards of 90 percent of the estimated A$11 billion in revenue in the first three years.

Fortescue Metals Group founder Andrew Forrest, one of Australia's richest individuals, who made his fortune in iron ore mining, led the delegation, which also warned the tax threatened Australia's economic competitiveness and would stifle exploration.

"The government hasn't thought this through," Forrest told reporters.

Swan rejected the delegation's claim that big mining companies would not pay the new tax, and said companies reaping big profits from the mining boom would be legally required to pay their fair share.

"This tax does not discriminate against small miners. It will be paid predominantly by large miners," Swan told parliament, adding the comments by Forrest were "complete rubbish."

The government on Wednesday introduced legislation for the tax to apply to iron ore and coal miners making A$50 million or more in annual profits. It is scheduled to start July 1, 2012, though it is still uncertain if the government has the support it needs from three independent lawmakers to pass the bills.

Forrest, BC Iron managing director Mike Young, and Atlas Iron chief Dave Flanagan lobbied independent parliament members on Thursday to push their case for the government to rethink supporting the tax.

The executives released projections from accounting firm DBO claiming the tax would see small- and mid-tier miners pay an effective rate of 46 percent, while BHP Billiton and Rio Tinto would pay no tax due to the large deductions they would be afforded.

Forrest said the bigger mining houses would pay no tax under the plans for up to 25 years.

Young also criticised the A$50 million profit threshold for the tax as too low because it would apply to miners after they produce only about 800,000 tonnes of iron ore, a relatively small tonnage.

"We are going to be well above this threshold," Young told reporters.

BC Iron mined about 600,000 tonnes of iron ore last year, and is aiming for around 3 million tonnes this year.

By comparison, Rio Tinto mined more than 200 million tonnes of ore, BHP Billiton 15 million tonnes and Fortescue around 40 million tonnes.

(sourced Reuters)

Rio Tinto update on rail network access in Pilbara

Monday, 31 Oct 2011

Earlier this year the Full Court of the Federal Court of Australia unanimously ruled that the service provided by Rio Tinto's Pilbara rail lines should not be declared as being available for access to third parties.

Rio release said that “Today the High Court of Australia granted Fortescue Metals Group Ltd and the National Competition Council leave to pursue appeals in relation to the decision of the Full Federal Court.”

The release added “No date has been set for the hearing of these appeals but it is expected that they will be listed in the first half of 2012.”

It also said “Rio Tinto maintains that the potential costs of access far exceed any theoretical benefits. This was accepted in the findings of the Australian Competition Tribunal. Rio Tinto will therefore take all appropriate steps to defend these appeals.”

Iron ore prices continue to crumble

Friday, 28 Oct 2011 | Sourced SMH

Iron ore prices have continued to crumble, potentially wiping more than USD 10 billion from annual export earnings should the lower levels be sustained to the end of next year.

Prices for the steel-making raw material have now plunged by USD 55 a tonne or 30% in the past eight weeks in response to what the Pilbara industry hopes is a temporary slowdown in demand from the world biggest consumer, China.

The price dump threatens to bring to a halt the rapid growth in mining company profits of the past two years as much as it squeezes federal government revenue expectations from the booming sector. Treasury does not disclose the commodity price expectations used in the budget process but it is believed to be no different from most forecasters in assuming an iron ore price reduction from a forecast 2011 average of USD 162 a tonne to a more modest USD 150 a tonne for 2012.

But USD 150 a tonne has quickly become a possible high-side expectation, with iron ore plunging 7.2% to USD 128.50 a tonne on Tuesday. Should the lower price level prevail as an average for 2012, there would be a USD 10 billion shortfall on a USD 150 a tonne expectation. At the corporate tax rate, that would punch a USD 3 billion hole in federal taxes. But the industry remains upbeat that stronger iron ore prices will return, and is eager to remind investors that operating costs of less than USD 50 a tonne in the Pilbara mean that even at the lower prices, the margins in iron ore remain fat.

Mr Nev Power Fortescue Metals chief executive officer added his name to the upbeat list. He said Chinese steel mills were going through a period of destocking that, once completed, should see pricing and demand return.

Mr Power said ''We are still selling all of the product that we are producing so there doesn't appear to be any major issues in that sense. We might see a couple of months of some volatility but then we would expect strength to continue.''

He was speaking after announcing that Fortescue had completed a well-flagged junk-bond raising in the US market that pulled in USD 1.5 billion.

Mr Power said the raising gave absolute certainty to the group's previously announced USD 8.4 billion expansion from annual production of 55 million tonnes to 155 million tonnes of iron ore. He said that “There was an opportunity to do more of the funding by internally generated cash flow. However, we wanted to remove any funding issues going forward. This raising has given us the balance sheet capacity to cover any eventuality in terms of timing.''

Fortescue and NCC granted leave to appeal for rail network access in Pilbara

Friday, 28 October 2011

Australian miner Rio Tinto has announced that the High Court of Australia has granted Fortescue Metals Group Ltd and the National Competition Council (NCC) permission to appeal the decision of the Full Federal Court regarding third party utilization of the Pilbara rail lines in Western Australia.

As SteelOrbis previously reported, the Full Federal Court has endorsed the decision of the Australian Competition Tribunal not to open Australian miner Rio Tinto's Hamersley rail network in the Pilbara region to third party utilization.

Rio Tinto stated that no date has been set for the hearing of these appeals but it is expected that they will be listed in the first half of 2012. Rio Tinto said it will take all appropriate steps against the appeals in question.

Tags: iron ore , Australia , Rio Tinto , Fortescue , raw mat , Oceania , mining

sourced steelorbis

Chinese iron ore destocking could take months - FMG

Thu, 27 Oct2011

Reuters quoted Australian miner Fortescue Metals Group said global iron ore prices down nearly 30% since early September could take months to recover as Chinese steel mills work off inventories.

Mr Nev Power Fortescue CEO told a media conference that "We are seeing some short term volatility because the steel mills are destocking in China. It has been a little more hand to mouth than what it has been."

Mr Power said “Fortescue held all its long term contracts in place and that those sales were going through. It's really the shorter term sales that are being shifted around and changed."

Mr Power when asked how long Chinese steel mills would continue to draw on existing inventories of iron ore said that "Probably a matter of weeks, maybe stretching to a couple of months."

He said weakening Chinese steel prices is contributing to reluctance by mills to immediately replenish stockpiles of iron ore.

He added that the steel prices have come down in China particularly the rebar price and that is causing some pain with the steel mills."

Mr Power said "We see continued strong growth, and that is going to be driven by the continued urbanization of central and western Chinese provinces, which are largely undeveloped and lack infrastructure at this stage."

(Sourced from Reuters)

Nimble FMG puts pressure on larger rivals in iron ore race

Tuesday, 25 Oct 2011

It is reported that the push to quickly ramp up iron ore production in Western Australia vast Pilbara region is very much a race between the nation three big iron ore miners Rio Tinto, BHP Billiton and Fortescue Metals Group.

The prize for faster expansion is longer access to windfall prices, which will probably fall as new supply emerges. Tonnes brought to market later will get lower prices.

Mr Nev Power CEO of Fortescue said "The sooner you can bring more volume into the market, the sooner you enjoy the high prices and high returns. He said that but every tonne that comes into the market will start to ease the supply bottleneck and therefore bring the price down."

Mr Power who took the chief executive job from Fortescue founder and major shareholder Andrew Forrest in July is continuing a strategy already in place when he joined. He said that "Our current strategy is very much about taking the opportunity of this strong demand out of China and responding to that with very rapid development and ramp-up of our projects.”

He added that "We recognize that these opportunities don't last forever and we recognize that the strong growth of China needs to be satisfied. Therefore the primary plank of our strategy has been to get in very quickly and meet that demand and to fuel that growth."

Fortescue has approved plans to triple its production to 155 million tonnes a year by June 2013 and if markets remain strong and it plans to move to 350 million tonnes four years after that.

Fortescue ambition to increase annual production capacity by 300 million tonnes in six years compares with BHP's plan to grow by 200 million tonnes to 350 million tonnes a year in eight years and Rio plan to add 100 million tonnes to 333 million tonnes in four years.

sourced TheAustralian

Australia’s High Court grants Fortescue leave to appeal against ASIC

Sept30,2011

Australian miner Fortescue Metals Group (Fortescue) has announced that the Australian High Court has granted Fortescue leave to appeal the Full Federal Court decision dated February 18, 2011 in the civil penalty proceedings brought by Australia's corporate regulator Australian Securities and Investments Commission (ASIC) against Fortescue and Fortescue's chairman Andrew Forrest.

Fortescue and Mr. Forrest requested to appeal the Federal Court decision to allow ASIC's appeal against the original judgment in favor of Fortescue and Mr. Forrest on December 23, 2009. The hearing date of the High Court Appeal has not been revealed yet.

As SteelOrbis previously reported, ASIC had alleged that Fortescue made misleading and deceptive statements about agreements with three Chinese enterprises which the company termed binding contracts when actually this was not the case.

Tags: Australia , Oceania , steelmaking , Fortescue
(sourced steelorbis)

Australia's Port Hedland shipments up 15.3 pct in August vs July

Sept7,2011

SYDNEY (Reuters) - Iron ore shipments from Australia's Port Hedland, one of the world's largest export terminals, jumped 15.3 percent to 20.22 million tonnes in August from July, data released by the port authority showed on Tuesday.

Shipments to China, the port's biggest destination, rose to 14.3 million tonnes from 12.62 million in July.

Billiton is the port's biggest user followed by Fortescue Metals Group Ltd .

Sinosteel and Gindalbie start Australia iron ore shipments

Thu Mar 31, 2011 3:49am GMT

SYDNEY, March 31 (Reuters) - Australia's Gindalbie Metals and Chinese metals group Sinosteel will start shipping iron ore to China on Thursday at a rate of 60,000 per month for eight months, Gindalbie said on Thursday.

Two-thirds of the ore will come from Sinosteel's Koolanooka mine, operated by an Australian subsidiary and the rest from Gindalbie's newly-developed Karara mine under an agreement reached earlier this year, a Gindalbie spokesman said.

Both mines are located in west Australia's Mid West region around 1,000 km (600 miles) south of the traditional Pilbara iron belt dominated by major producers Rio Tinto , BHP Billiton and Fortescue Metals Group , which this year are forecast to ship a combined 500 million tonnes.

High-grade Karara hematite lump ore is currently being loaded onto the Panamax vessel, M.V. "Ju Da", which is scheduled to sail for China on Thursday evening, according to Gindalbie.

Tags : iron ore shipment to China, raw material, steelmaking

Australia's BC Iron agrees $341 million bid by Regent Pacific

Thu Jan 20, 2011 11:02pm GMT

* Cash offer a 4pct premium to last trade

* Regent says no change to BC Iron management, strategy

* Consolidated Minerals biggest shareholder (Adds detail)

SYDNEY, Jan 21 (Reuters) - Australia's BC Iron has recommended a cash takeover offer from major shareholder Hong Kong's Regent Pacific Group in a deal valuing the company at A$345 million ($341 million).

Regent, which is BC Iron's second-largest shareholder with a 19.87 percent stake, is offering A$3.30 cash per share. The offer is a 4 percent premium to BC Iron's last trading price of A$3.17.

BC Iron's biggest shareholder is Consolidated Minerals, owned by Ukrainian billionaire Gennadiy Bogolyubov's Palmary Enterprises.

BC Iron and Regent's shares were placed in a trading halt on Wednesday pending the transaction. BC Iron's core asset is its Nullagine coal project, a 50-50 joint venture with Fortescue Metals .

"Regent Pacific is seeking to be a long term player in both the growth and development of BC Iron and the Australian iron ore sector," Regent Pacific Chief Executive Jamie Gibson said, adding there were no plans to change the target's current management or strategy.

The venture plans to utilise Fortescue's transport facilities at its Christmas Creek iron ore mine, 50 kilometres south of Nullagine, to rail ore to Port Hedland for shipping to overseas steel mills.

Iron ore is currently being stockpiled and the first shipment from Port Hedland is expected in the first quarter of 2011 -- four years after BC Iron listed on the Australian stock market. The company plans to export 1 million tonnes by June 2011 and then operate at an annual rate of 3 million tonnes.

Under the terms of the partnership, Fortescue buys BC Iron's share of the iron ore at the "mine gate" and assumes responsibility for shipping and marketing.

Fortescue is already operating at an annual rate of 40 million tonnes and is looking to boost that to 55 million this year.

Spot iron prices are trading at their highest level since April 2010.

($1 = 1.012 Australian Dollars)

(source: Reuters, Reporting by Michael Smith; editing by Balazs Koranyi)