Iron Ore-Spot prices inch up but China demand still weak

Thursday, 23 Feb2012

Spot iron ore prices in China inched up on Wednesday but traders said the underlying poor health of the steel sector would continue to restrain demand. "The whole market is poor and prices still aren't ideal -- we won't be able to meet our sales target for this month," said the manager of an iron ore trading firm based in southern China.

Pilbara fines with 61.5 percent iron content were being quoted at $136-138 per tonne including cost and freight on Wednesday, inching up $1 from the previous day, according to consultancy Umetal. Iron ore with 62 percent iron content edged up 0.2 percent to $135.40 a tonne on Tuesday, according to reference price provider Steel Index.Slow steel demand in China, the world's biggest producer and consumer, has curbed the appetite for iron ore and sent the raw material's prices down more than 2 percent so far this year after falling nearly 19 percent in 2011.

"Demand ultimately depends on steel mills and they just can't accept our prices right now, and we can't go lower because our costs are too high," the trader said, adding that he didn't expect the market to recover until next month. China's move to cut banks' reserve requirement ratio for the first time this year helped Shanghai rebar futures end a seven-day slide on Monday and iron ore to snap a nine-day losing streak.
The price of Shanghai's most traded May rebar contract rose 23 yuan ($3.65) or 0.54 percent to end Wednesday at 4,251 yuan per tonne.Shanghai rebar futures and iron ore indexes at 0335 GMT
Source: Reuters

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)

Rio Tinto launches driverless trucks in the Pilbara

Monday, 16 Jan 2012

It is reported that RIO Tinto is set to bring 150 driverless trucks to its Yandicoogina mine in WA.

The decision comes after three years of testing the autonomous Komatsu 930E-AT vehicles and their technology at the West Angelas iron ore mine. The fleet is to be fully delivered by the end of 2015.

The autonomous trucks have a payload of 290 tonnes and are equipped with vehicle controllers a high precision global positioning system an obstacle detection system and a wireless network. The system learns’ the layout of the mine and determines the most efficient route from loading face to dump site taking into account wear and tear potential delays and fuel consumption.

When loading, a GPS-fitted hydraulic excavator or wheel loader providing exact positioning of the bucket and guides the trucks into position. The trucks are linked to a supervisory computer at an operations centre with real-time monitoring of speed and course. While this operations centre will initially be located on-site, plans are in the works to eventually move it to Perth as part of an over-arching Operations Centre where the system will be controlled 24 hours per day.

The OC will manage control for mining, rail transport, ship loading and critical infrastructure for all of Rio Tinto’s iron ore projects in the Pilbara.

Mr Tom Albanese Rio Tinto Chief Executive said “Autonomous haulage is an important component in our Mine of the Future program.”

Safety wise, the obstacle detection system prevents collisions with other dump trucks, service vehicles and equipment. If another vehicle or person is detected, the automated truck is programmed to reduce speed or stop immediately. The technology can be used in harsh environments, including high altitudes and extreme desert conditions. They can also be deployed to highly remote regions.

From an environmental point of view, Rio expects the system to optimise operations and reduce maintenance, thus conserving energy and reducing emissions.

(sourced www.sciencewa.net.au)

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)

Pre Chinese New Year iron ore restocking remains limited

Tuesday, 10 Jan 2012

Reuters reported that thin demand for steel is limiting buying interest among the Chinese for raw material iron ore before the week long holiday that starts on January 23.

In the past years Chinese mills have aggressively stocked up iron ore ahead of the annual holiday and lifting spot iron ore prices strongly during the period.

The Shanghai trader said "There's some restocking activity but it's limited. Most of our clients are still hesitating to purchase too much raw material because the steel market is not that encouraging."

Chinese consultancy Umetal said offer prices for imported iron ore in China were mostly steady on Monday with Australian Pilbara fines at USD 139 a tonne to USD 141 a tonne and Yandi fines at USD 126 per tonne to USD 128 a tonne including cost and freight.

Umetal said Indian 63.5/63-grade fines were quoted at USD 145 to USD 147 a tonne.

(Sourced from Reuters)

Iron Ore-China market still slow as traders stay away

Thursday, 05 January 2012

Spot iron ore prices in China were mostly unchanged on the first trading day of 2012, with buyers and sellers unable to find a reason to rush back from a two-day new year break.
The offer price of 61.5 percent Pilbara fines, including cost and freight, stood in the $136-139 per tonne range on Wednesday, unchanged from the last trading day of 2011, industry consultancy Umetal said. Analysts said there was little to entice buyers back into the market, with steel demand low and ore inventories generally sufficient to keep mills running.
"What concerns me a little bit is that Chinese mills seem to have restocked over the last three to four weeks without really pushing the price up at all," said Graeme Train, commodity analyst with Macquarie Securities in Shanghai.

Activity normally slows ahead of China's lunar new year, and many traders have expressed hope that the market will improve when the week-long holiday ends on Jan. 30, but the lull could last longer than that, said Train. "It seems everyone is waiting for some signal that things are going to get meaningfully better but the government has been very slow to send a very positive signal," he said.

"There is really no catalyst, and we are probably looking at two very quiet months at least."
Analysts played down the impact of India's decision to raise export tariffs in order to guarantee supplies to domestic users, saying the influence of the world's third-biggest iron ore producer had already been on the wane.

India announced this week that it would increase iron ore export tariffs from 20 percent to 30 percent in an effort to guarantee supplies for domestic users.
"I can't see demand strong enough in 2012 to make global supply and demand tight enough to bring Indian marginal producers back into the market, so I can't see it supporting higher prices," said Sebastian Lewis, head of data and analytics with Steel Business Briefing in Shanghai.
"More likely it will accelerate the trend in declining Indian exports and Australia and other miners will be the beneficiaries," he said. Umetal said Indian 63.5/63 percent iron ore was being offered at $143-146 per tonne on Wednesday, also unchanged.

It added in a research note that the decline in Indian iron ore export volumes had already been offset by growing shipments from South Africa, Iran, Canada and Russia.
While India remains China's third-biggest supplier after Australia and Brazil, its market share has been in decline. In the first 11 months of 2011, India's total shipments of 63.3 million tonnes represented 11 percent of the total, down from 15.6 percent in 2010.

Deliveries from South Africa, Iran, Canada and Russia reached nearly 73 million tonnes over the 11 months, up 33 percent compared with the same period of the previous year.
The most traded steel rebar contract on the Shanghai Futures Exchange ended Wednesday at 4,159 yuan ($660) per tonne, down 51 yuan per tonne or 1.21 percent from the previous session.
Source: Reuters

Iron Ore-China market still slow as traders stay away

Wed Jan 4, 2012

* Prices largely unchanged in first trading day of 2012
* No positive signals to entice buyers back to market
* Impact of Indian export tariff increase seen limited (Updates rebar price)

BEIJING, Jan 4 (Reuters) - Spot iron ore prices in China were mostly unchanged on the first trading day of 2012, with buyers and sellers unable to find a reason to rush back from a two-day new year break.

The offer price of 61.5 percent Pilbara fines, including cost and freight, stood in the $136-139 per tonne range on Wednesday, unchanged from the last trading day of 2011, industry consultancy Umetal said.

Analysts said there was little to entice buyers back into the market, with steel demand low and ore inventories generally sufficient to keep mills running.

"What concerns me a little bit is that Chinese mills seem to have restocked over the last three to four weeks without really pushing the price up at all," said Graeme Train, commodity analyst with Macquarie Securities in Shanghai.

Activity normally slows ahead of China's lunar new year, and many traders have expressed hope that the market will improve when the week-long holiday ends on Jan. 30, but the lull could last longer than that, said Train.

"It seems everyone is waiting for some signal that things are going to get meaningfully better but the government has been very slow to send a very positive signal," he said.

"There is really no catalyst, and we are probably looking at two very quiet months at least."

Analysts played down the impact of India's decision to raise export tariffs in order to guarantee supplies to domestic users, saying the influence of the world's third-biggest iron ore producer had already been on the wane.

India announced this week that it would increase iron ore export tariffs from 20 percent to 30 percent in an effort to guarantee supplies for domestic users.

"I can't see demand strong enough in 2012 to make global supply and demand tight enough to bring Indian marginal producers back into the market, so I can't see it supporting higher prices," said Sebastian Lewis, head of data and analytics with Steel Business Briefing in Shanghai.

"More likely it will accelerate the trend in declining Indian exports and Australia and other miners will be the beneficiaries," he said.

Umetal said Indian 63.5/63 percent iron ore was being offered at $143-146 per tonne on Wednesday, also unchanged.

It added in a research note that the decline in Indian iron ore export volumes had already been offset by growing shipments from South Africa, Iran, Canada and Russia.

While India remains China's third-biggest supplier after Australia and Brazil, its market share has been in decline. In the first 11 months of 2011, India's total shipments of 63.3 million tonnes represented 11 percent of the total, down from 15.6 percent in 2010.

Deliveries from South Africa, Iran, Canada and Russia reached nearly 73 million tonnes over the 11 months, up 33 percent compared with the same period of the previous year.

The most traded steel rebar contract on the Shanghai Futures Exchange ended Wednesday at 4,159 yuan ($660) per tonne, down 51 yuan per tonne or 1.21 percent from the previous session. ($1 = 6.294 yuan)

(sourced Reuters)

Aquila in talks with two bidders for Australian coal asset

Saturday, 17 Dec 2011

Bloomberg reported that Aquila Resources Ltd selling assets to help fund a AUD 5.2 billion iron ore project in Australia is in talks with two bidders for the sale of a coal asset.

Mr Martin Alciaturi general manager finance and corporate of the Perth based company said that “We remain in active dialog with two bidders and expect to announce a transaction in the near future.”

Aquila plans to develop the West Pilbara Iron Ore port, rail and mine project with joint venture partner AMCI Inc as demand for steel in China grows. The company is selling three assets, including the Washpool coking coal project in Australia and the Avontuur manganese project in South Africa.

Mr Alciaturi said that “We remain in active dialog with two bidders and expect to announce a transaction in the near future.”

Washpool is valued at AUD 263 million and Avontuur at AUD 120 million.

(Sourced from Bloomberg)

Iron Ore-Spot prices may fall further on slow China demand

Tuesday, 29 November 2011

Spot iron ore prices are likely to extend losses this week as lean steel demand in top consumer China may limit appetite for the raw material, with sellers cutting prices further on Monday. Iron ore with 62 percent iron content dropped half a percent to $140.40 a tonne on Friday, according to the Steel Index .IO62-CNI=SI, putting its weekly loss at 4.8 percent. It was iron ore's first weekly drop in four weeks.

"The price will continue to slide this week. Sentiment hasn't really changed much, steel demand in China is still very limited," said an iron ore trader in Shanghai.

Offer prices of imported iron ore in China fell by another dollar per tonne on Monday, with Australian Neman fines quoted at $139-$141 a tonne, cost and freight and MAC fines at $133-$135, said Chinese consultancy Umetal.

Australian Pilbara iron ore fines were offered at $135-$137 a tonne and Indian 63.5/63 grade fines were quoted at $143-$146, said Umetal.

Iron ore prices fell to 22-month lows below $117 a tonne in late October when thin Chinese steel demand slashed the appetite for the steelmaking ingredient.

But traders said prices are unlikely to go into freefall again as supplies remain tight.

"The big miners are not putting too many cargoes in the spot market, supply from India has been reduced dramatically and a lot of traders are holding on to their cargoes, waiting for prices to recover before they sell," said a physical iron ore trader in Singapore.

Rio Tinto , the world's No. 2 iron ore miners, warned on Monday that further cracks may be emerging in global commodities markets as the economies of Europe and the United States waver, with its customers increasingly cautious on the outlook.

Prices of iron ore, copper and aluminium -- among Rio's biggest income earners -- have tumbled by more than 20 percent each since August as stockpiles of unused metal swell in warehouses from Rotterdam to New Orleans to Shanghai.

BHP Billiton , the third biggest iron ore producer, expects China's steel output to continue at current rates, below historical highs, for some time.

"When we talk to our Chinese customers there is not a sentiment that the operating rate in the steel industry will improve or change dramatically over the next little while," Chief Executive Marius Kloppers said on a conference call.

Source: Reuters

Aquila Resources approves West Pilbara iron ore project

Monday, 14 Nov 2011

Aquila Resources Limited advise that it has advanced the approval processes for the West Pilbara Iron Ore Project in which the Company holds a 50% interest, regarding the development of Anketell Port and the development of a railway, mines and mine infrastructure south west of Pannawonica.

Port Facilities
In a letter received today, DSD has given its support to the assessment by the Environmental Protection Authority of an amendment to the Anketell Port PER to describe a revised port layout.

The amendment document describes and evaluates changes to the port proposal and addresses submissions received on the original PER and DSD acknowledged that the environmental data and analysis in
the draft PER was a significant consideration in the Dampier Port Authority’s master planning process.

The PER amendment document will be available for examination for 30 days from next week. On the current schedule a report from the EPA as to the environmental acceptability of the proposed Anketell Port development is anticipated late in the March Quarter 2012.

The revised proposal provides for other mining companies to participate in the port development of up to 100Mtpa.

Mine and Rail Facilities
Progress is being made in respect of other approvals necessary for the Project. State and Commonwealth Ministerial environmental approvals for the mine and rail elements are expected before the end of the year.

The Stage 1 Project Management Plan for the construction and operation of the mining operations has been approved by the Department of Mines and Petroleum.

Applications for Mining Leases and other tenure necessary for the mining operations and infrastructure such as Miscellaneous Licences have been lodged with the Department of Mines and Petroleum. Assuming a successful completion of Native Title agreements, receipt of the Mining Leases is expected by mid-2012.

HIGHLIGHTS
1. Department of State Development supports amendment of the Anketell Port Public Environmental Review to accommodate up to 100 million tonne per annum capacity development
2. Environmental approvals from the State and Commonwealth governments for the mine and rail facilities are expected before the end of the year

3. Applications for Mining Leases and Miscellaneous Licences submitted to the Department of Mines and Petroleum

4. The Department of Mines and Petroleum has approved the Stage 1 Project Management Plan for the mining operations

Rio Tinto boosts driverless truck fleet to 150

Thursday, 03 Nov 2011

Rio Tinto is to become the owner of the world’s largest fleet of driverless trucks after it signed a deal to buy at least 150 from Komatsu Limited over the next four years. The new trucks, which will start arriving in 2012, will be used in Rio Tinto’s Pilbara iron ore mines in Western Australia and can be controlled from its Operations Centre in Perth more than 1500km away.

The move signals a 15 fold expansion from its previous plan to double the fleet to 10 trucks. This is the latest development in Rio Tinto’s Mine of the Future program which introduces next-generation technologies for mining operations with the aim of reducing costs, increasing efficiency and improving health, safety and environmental performance. Implementing autonomous haulage on this scale means more material can be moved more quickly and safely, creating a direct increase in productivity.

In Tokyo Mr Tom Albanese CEO of Rio Tinto and Komatsu Limited president and chief executive officer Mr Kunio Noji signed a Memorandum of Understanding for the supply and purchase of the trucks.

Mr Albanese said that “This announcement further reinforces our longstanding alliance with Komatsu. We have been partnering with Komatsu, using their advanced truck technology at our mines, for almost 20 years. Autonomous haulage is an important component in our Mine of the Future program. These 150 new trucks will work with our pioneering Operations Centre that integrates and manages the logistics of 14 mines, three ports and two railways. These technologies are revolutionising the way large scale mining is done, creating attractive hi-tech jobs, and helping us to improve safety and environmental performance and reduce carbon emissions.”

Rio Tinto has been testing the Komatsu Autonomous Haulage System, the world's first commercial autonomous mining haulage system, in the Pilbara since December 2008. During the trials the AHS technology demonstrated benefits in health, safety and productivity. Elsewhere in its Mine of the Future program, Rio Tinto will begin more widespread deployment of its automated drills, both in the Pilbara and at coal and copper mines.

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.''

Australia’s IOH sells three iron ore tenements in Pilbara

Friday, 14 October 2011

Australia-based iron ore exploration company Iron Ore Holdings Limited (IOH) has announced that it has sold its three Central Pilbara satellite tenement packages, namely Phil's Creek, Lamb Creek, and Yandicoogina Creek to Process Minerals International (PMI), wholly-owned subsidiary of Australia-based diversified mining service and processing company Mineral Resources Ltd.

IOH will receive A$42 million cash over a 90-day period and at the final completion of the MinRes transaction IOH will retain 100 percent ownership of 878 million mt of JORC resources in the Pilbara region of Western Australia.

According to the IOH statement, for the transaction to be completed, IOH needs to get ministerial consent for the transfer of the relevant tenements and approval from the Department of Minerals & Petroleum for the Phil's Creek mining proposal. The parties have 45 business days to satisfy these conditions.

Tags: raw mat , Australia , Oceania , mining

BHPB buys Australia's Leighton Pilbara iron ore business

Saturday, 01 Oct 2011

BHP Billiton has completed its acquisition of HWE Mining Subsidiaries from Leighton Holdings.

This follows the previously announced Heads of Agreement, signed on 9 August 2011.

The acquisition relates to the mining equipment and related assets that service the Area C, Yandi and Orebody 23/25 operations. These operations collectively account for almost 70% of Western Australia Iron Ore’s total material movement.

Mr Ian Ashby BHP Billiton president iron ore said “With the legal and due diligence processes now complete, our primary focus moves to ensuring the integration of the highly skilled workforce into the BHP Billiton business in a safe and efficient manner.”

Rio Tinto to invest more in Pilbara iron ore expansion

Thursday, 15 Sept 2011

Rio Tinto is to invest USD 833 million (Rio Tinto share USD 706 million) in major power and fuel supply projects as part of its drive to substantially increase iron ore production capacity in Western Australia.

Rio Tinto's integrated Pilbara power and gas network will be upgraded with a USD 520 million investment and a further USD 313 million will be allocated to fuel infrastructure facilities.

The projects are needed to support annual production capacity of 283 million tonnes per annum, a milestone Rio Tinto has targeted for 2013. The fuel infrastructure project will also help support the next phase of potential expansion, to 333 million tonne per annum in 2015.

Mr Sam Walsh CEO Iron Ore and Australia said "This investment marks yet another significant step towards the expansion of iron ore production by 50 per cent in the five years to 2015, a timeline we recently brought forward by six months. These projects provide certainty in meeting our power and fuel supply requirements, both now and into the future."

Power infrastructure
A USD 520 million (Rio Tinto share USD 417 million) upgrade of the integrated power and gas network will deliver an additional 120 MW to sustain the current 230 million tonne per annum capacity and support expansion to 283 million tonne per annum. Two 40 MW open cycle gas turbines will be installed as part of a new power station near the West Angelas mine site and a 40MW open-cycle gas turbine will be built at the existing Yurralyi Maya Power Station near Dampier. The investment also provides for associated power infrastructure such as substations, gas pipelines and transformers.

Fuel facilities
The USD 313 million investment (Rio Tinto share USD 289 million) in fuel infrastructure will support the expansion programme to 283 million tonne per annum, and provide some of the capacity needed for expansion to 333 million tonne per annum. On completion, the fuel network will have a total storage capacity of 100ML, with 56ML additional capacity at Parker Point port terminal at Dampier. Two new inland distribution hubs will also be created, removing the requirement for two trains to transport fuel from Port Hedland, some 400 kilometres to the north.

Rio Tinto's schedule for expanding its integrated Pilbara operations is as follows
225 million tonne per annum - current operating capacity
230 million tonne per annum by end of Q1 2012 - Dampier port incremental (in implementation)
283 million tonne per annum by end of H2 2013 - Cape Lambert 53 million tonne per annum increment (in implementation)
333 million tonne per annum by end of H1 2015 - Cape Lambert 50 million tonne per annum increment (in feasibility study)

Rio Tinto gives AUD 184 million contract work for Pilbara mine

Tuesday, 23 Aug 2011

Rio Tinto PLC said that it has handed out further contracts for construction of its new USD 1.2 billion Hope Downs 4 mine as it pushes ahead with plans to ramp up iron ore output to 333 million tonnes a year in 2015 from Western Australia's Pilbara region.

The Anglo Australian mining giant said it has given contracts worth about AUD 184 million (USD 191 million) to two joint ventures with indigenous Australians for work at the mine site, which will have an annual capacity of 15 million tonnes.

Rio said more than AUD 700 million has been awarded to Aboriginal contractors under its expansion program.

Leighton Holdings Ltd in a separate statement said its 75:25 joint venture with indigenous contractor Ngarda Civil & Mining Pty Ltd has received a AUD 104 contract for stripping earth, road-work, drainage and other earthworks at the site some 200 kilometers east of Tom Price.

(sourced from Dow Jones)

Competition heats up for Pilbara port and rail use

Thu,August 11, 2011
By Minsi Chung

With several key iron ore projects due to come online in the north west of Western Australia, competition for existing port and rail infrastructure is intensifying.

The proposed $4 billion open access port at Anketell Point about 30 km east of Karratha is expected to be one of the solutions, with the port set to ship 350 million tonnes of product a year.

The Environmental Protection Authority has recently given Aquila Resources approval for the $6 billion West Pilbara Iron Ore Project south of Pannawonica, which includes the construction of a 285 km rail line connecting the mine to the Anketell Point Port.

Companies like Aquila are now hoping the next step will be the environmental approval for the port itself.

The Aquila Executive Chairman Tony Poli says Anketell is of paramount importance - not just to the West Pilbara Iron Ore Project - but also to the state.

"With the fullness of time there will be also other industrial uses, agricultural uses going through Anketell Point, so it is an extremely important asset to the state, putting aside the significant royalties the state will win from Aquila and other companies exporting iron ore to China."

He says the open access port is also important for other companies, especially the smaller iron ore players.

"It is very important to the West Pilbara; there is no other open access port in the West Pilbara," he said.

"You have Rio Tinto's Cape Lambert [port] which is only 10 km away from the proposed Anketell Port but unfortunately it is not open to third parties.

"It is a significant project for companies like Atlas Iron and Iron Ore Holdings, who have made it public they would also like to use Anketell and other companies like Flinders, who are very dependent on the on the development of Anketell, it must be high on their list of priorities.

"Indeed it could service one day FMG, Rio Tinto and BHP."

Fortescue Metals Group has also flagged its interest in the port at Anketell.

While FMG currently exports out of Port Hedland Port, a company spokeswoman says Anketell is crucial to its plans to expand its capacity to 155 million tonnes a year.

"The timely development of a new Pilbara port is vital for the future expansion of the Pilbara resources industry," she said.

"Fortescue's priority in the development of the port is that it is built with future expansion in mind."

Anketell is expected to open up new growth opportunities in the region and will be important to ease the pressure off other ports, which are approaching capacity.

The Port Hedland Port, which is the main multi-user port in the region, reported record figures last financial year, shipping more than 199 million tonnes of bulk exports.

The 2010-2011 figure is up more than 20 billion tonnes on the previous year and is a jump of 80 per cent on five years ago.

While Port Hedland is expanding to take its capacity to more than 400 million tonnes in the coming years, it is currently fully allocated.
Who will lead?

Anketell is funded solely by the private sector and once built, will be managed by the Dampier Port Authority.

Aquila Resources is hoping to become the lead proponent as part of the API joint venture with US investment group AMCI, but will have to fight FMG for the rights to be the lead company.

The State Government is expected to decide by the end of the year whether it is Aquila, FMG or even a third party, who will take control of building the port.

And the government will be keen to avoid the problems which have plagued another of the state's key port developments, Oakajee, which has been delayed over funding concerns.

Aquila's Tony Poli believes Anketell will go ahead.

"I think the significant advantage we have is that the feasibility study we have completed on the project clearly shows that our project alone will support the development of the port," he said.

In a report by Bell Potter analysts Fleur Close and David George, Aquila is marked as the lead contender because its West Pilbara Iron Ore Project is the driver of the port project and the approvals process, but it needs to show it can come up with the money.

"From the government's point of view, it will be looking to appoint someone it can count on to deliver," the report stated.

"The other port project the government has supported is the Oakajee Port project which has failed to deliver on time.

"From that perspective, FMG is well credentialed".

And FMG says it is confident it has the sufficient resources to underpin the Anketell Point project.

But Mr Poli also appears optimistic and says Aquila is looking forward to demonstrating it has the financial capabilities to fund the infrastructure of the port.

"We hope to have some positive announcements in terms of funding in the September quarter," he said.

"We are in discussions [with] the China Development Bank as a result of a MOU with Baosteel."

Aquila needs the port by 2014 when it expects to start producing from the West Pilbara Iron Ore Project.

FMG also expects to reach its 155Mtpa production target in 2014.

Meanwhile, the Environmental Protection Agency is due to release its environmental assessment for Anketell by the end of this year, with construction scheduled for the second quarter of next year.

The West Pilbara Iron Ore Project is now waiting for the final greenlight from the Environment Minister Bill Marmion.

(sourced ABC.net)

Caterpillar inks MoU with FMG for Solomon iron ore development

Thursday 04 Aug, 2011 |Miningmagazine

Caterpillar and its Australian dealer, WesTrac, have signed a memorandum of understanding with Fortescue Metals Group to implement an autonomous mine haulage solution at FMG's new Solomon iron ore development in Pilbara in Western Australia. This will be the first large commercial installation of Caterpillar's autonomous trucks anywhere in the world.

The deal, which is focused on boosting productivity and performance, will comprise several elements, including the full Cat MineStar System technology suite and an initial fleet of 12 Command autonomous 793F haul trucks. These will be installed in the September and December quarters of 2012. The companies anticipate that Solomon will have a total of 45 autonomous trucks by 2015.

Mr Chris Curfman VP of Caterpillar Global Mining said that "By working closely with mining customers, we are able to tailor a solution to their specific business needs using Caterpillar's broad range of products, technology and services. This collaboration will also positively impact sustainability at Solomon mine through reduced environmental footprint and machine efficiencies."

Though still relatively new, FMG has quickly established itself as one of the world’s largest producers and traders of iron ore. The company, which was formed in 2003, owns approximately 87,000 square kilometers of Pilbara tenements.

FMG's first mine site, Cloudbreak, began production in May 2008, and Christmas Creek came on line in April 2009. Since 2006, FMG has expanded its exploration westwards. The Solomon area, which is about 70 kilometers north of Tom Price, has been chosen as the next area for development.

Consultant Coffey Mining prepared a reserve estimate for the project earlier this year, based on FMG's own resource estimate for the deposits of Kings and Firetail.

The probable reserve estimate totaled 716.3 million tonnes at an average grade of 56.3% Fe, 7.66% SiO2, 2.93% Al2O3 and 0.073% P.
Mining was forecast to support iron ore production of 60 million tonnes per annum, comprising 40 million tonnes channel iron deposit fines and 20 million tonnes Brockman fines, for a decade.

Mr Neville Power COO of FMG said that "Innovation is at the heart of Fortescue's values. It is how we started this business through different exploration and mining practices, and it will be critical in how we implement our extensive growth aspirations. One of the key growth challenges we face is around availability of people and the need to best utilize this valuable resource. As such, it is incumbent upon us to look at new ways of doing things. The expected roll out is more than just a trial. It is the unique capabilities that the three parties bring to this agreement that will deliver the world’s leading autonomous mining solution at Solomon."

Caterpillar and WesTrac will work together to provide product and technology implementation, consulting and management services to Solomon mine, as well as operating the complete autonomous system once it is up and running. WesTrac will also be responsible for supporting the Caterpillar mining fleet at Solomon with machine and technology technicians and support personnel.

Mr Jim Walker CEO of WesTrac Group said that "By marrying our Cat product expertise with these ‘building block’ technologies, we are well positioned with Caterpillar to provide Solomon mine with a turnkey autonomous mining solution."

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

Fortescue says on track to run 55 mln tonne/yr of iron ore by end FY 2011

Tue Mar 22, 2011 4:13am GMT

PERTH, March 22 (Reuters) - Fortescue Metals remains on track to increase its run rate to 55 million tonnes of iron ore per year from its Pilbara operations by the end of fiscal 2011, the company said on Tuesday.

The increase from about 38 million tonne per year rate was a result of expansion work in Western Australia's Pilbara's belt to capture more of China and India's growing demand, Neville Power, Chief Operating Officer of Fortescue Metals Group, said on Tuesday at an industry conference.

"We are running our (mining) tenements hard to bring those tonnes to market," Power said.(Reuters)