Steel raw materials – Iron ore Magnus Ericsson 9th Annual Steel Markets Europe London, May 23-24, 2013 孟瑞松
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Steel raw materials –
Iron ore
Magnus Ericsson
Magnus Ericsson
9th Annual Steel Markets Europe
London, May 23-24, 2013
孟瑞松
Chinese iron ore imports
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2013.
Iron ore mines/ projects
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2013.
Global iron ore cash cost
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2013.
• Demand / Supply
• China
• Nordic countries
• Political interest
• Conclusions
Outline
Raw Materials Group
• Part of the IntierraRMG group since 2012
• 30 years industry leadership in data, mapping,
analysis and reporting.
• IntierraLive and Raw Materials Data.
• Strategy development
– Mining companies, equipment & service
• Mineral policy, investment promotion
– Governments, International organisations
• Pre-feasibility/Feasibility studies
– Financial institutions, companies
061030 Anton Löf
Demand/
Supply
Manganese drawing: Kaianders Sempler.
World population growth
Anton Löf
0
1
2
3
4
5
6
7
8
9
10
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Bil
lio
n
World More developed regions (OECD)
Urbanisation 1950-2050.
Anton Löf
—
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
More developed regions Less developed regions
Urb
an
po
pu
lati
on
in
th
ou
san
ds
Global iron ore production
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2013.
Iron ore mines/ projects
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2013.
African project activity
061030 Anton Löf
0
200
400
600
800
1000
1200
1400
AFRICA REST OF WORLD
Source: IntierraLive, 2013.
African project activity
061030 Anton Löf
0%10%20%30%40%50%60%70%80%90%
100%
AFRICA REST OF WORLD
Source: IntierraLive, 2013.
Project delays
061030 Anton Löf
• Supply constraints increasing.
• Under estimated infrastructural problems.
• Lack of investors.
• Political risks/ resource nationalisation.
• Permitting processes.
Project delays
061030 Anton Löf
• Fortescue 150-115 Mt.
• Simandou project, change of government –
revision of terms.
• Belinga, not to be awarded until 2014, after
Chinese CMEC lost the rights.
• El Mutun, Jindal lost the rights.
• BHP’s outer harbour.
• LKAB environmental permits.
• Carajás railway expansion halted.
061030 Anton Löf
Demand/
Supply
Manganese drawing: Kaianders Sempler.
• Underlying demand
drivers remain in place.
• Supply constraints
increasing.
061030 Anton Löf
China
061030 Anton Löf
Chinese structure
• Fragmented structure.
• Many small mines.
• Vertical integration.
061030 Anton Löf
Chinese
production costs
• Small mines most < 0.5-1 Mt.
• Deeper underground.
• Cost components increasing.
• Max total volume 200- 300 Mt.
• Marginal cost of production ?
061030 Anton Löf
European
iron ore
Nickel drawing: Kaianders Sempler.
European iron ore
mines/projects
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2012.
European capital raising
061030 Anton Löf
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
$700,000,000
$800,000,000
Jan 2010 - May 2013 Capital Raising by Focus
Exploration Development
Capital Expenditure Asset Acquisition
Nordic iron ore projects
061030 Anton Löf
Source: Raw Materials Data Iron ore, 2012.
Loca-
tion
Total
resources
(Mt)
Total ore
reserves
(Mt)
OP/UG Start Cap.
Mt/a
Beowulf Swe 300.6 OP 10
Dannemora Mineral Swe 34.9 35.1 UG 2012 2.5
Grängesberg Iron Swe 163.1 82.4 UG Q4 2015 2.5
Kiruna Iron Swe 667.7 OP 2-5
LKAB (Leveäniemi,
Mertainen) Swe 937 953 OP
2013-
2014 12.5
Nordic Iron Ore Swe 94.1 UG 2015 2.5
Northern Iron Ltd Nor 458.7 172.3 OP 2.8
Northland Resources Swe/Fin 855.2 345.5 OP 2012-14 5
Rana Gruber AS Nor 250 UG <1.5
Nordic conclusions
• European leaders: today and in the future.
• High quality ore and products.
• Cost levels high but not yet prohibitive.
• Close to market in Europe.
• Alternatives to ”Big 3”.
• Long mining history – industry accepted by most.
• Policy changing, supporting local mines.
• Baltic cluster vibrant developments.
• Leading research centre at Luleå.
Vanadium drawing: Kaianders Sempler.
Political
initiatives
• China
• EU
• Africa
061030 Anton Löf
China taking
over Africa?
061030 Anton Löf
Chinese foreign expansion
• Foreign expansion slow, not continuous.
• Limited number of operating mines in
Africa.
• Lack of large scale experiences and
technology.
• Will increase in the future.
• Long term security of supply remains
serious problem for China.
061030 Anton Löf
• Raw Materials Initiative.
• European Innovation Partnership.
• Strong focus on speciality metals.
• Recycling and mining.
• Nordic countries in the lead.
EU policy
061030 Anton Löf
Africa Mining Vision
• African Mineral
Development Center
(AMDC)
• Starts 2013
• African exploration
initiative.
Vanadium drawing: Kaianders Sempler.
Political initiatives
• China early stage.
• EU reviewing
policies.
• Opportunity to
redefine Africa’s role.
061030 Anton Löf
Conclusions
Molybdenum drawing: Kaianders Sempler.
Conclusions
061030 Anton Löf
• Demand drivers remain in place.
• Supply constraints increasing.
• Chinese overseas expansion slow.
• In Europe small newcomers will emerge.
• Increased political interest/actions.
• Prices will fall but remain on a high level.
Magnus Ericsson
PO Box 3127
SE-169 03 Solna, Sweden
Tel: +46-8-744 00 65
Fax: +46-8-744 0066
www.rmg.se
www.intierrarmg.se
Thank you !
NIckel drawing: Kaianders Sempler.
061030
Metals first isolated in
Sweden/Finland
Please visit www.rmg.se
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