May 17, 2020

World's Biggest Iron Ore Buyers and Why Vale is Targeting Them

Jose Carlos Martins
Vale
Vale SA
Vale
Admin
2 min
Vale targets world's largest iron ore buyers
Referencing back 10 years in the mining market, this current fiscal period marks the first time that iron ore supply is now greater than the demand. Mor...

Referencing back 10 years in the mining market, this current fiscal period marks the first time that iron ore supply is now greater than the demand. More than that, the industry is actually faced with the potential of an oversupply in the iron ore market. These factors combine to continue driving selling prices downward. This negative trend is compounded for mining giant Vale SA due to the demand for iron ore rebounding at a slower rate than originally forecasted.

As the largest iron-ore producer, Vale SA is likely feeling this negative impact more than any other mining corporation. The projected metric tonnage of additional iron ore likely to hit the global market this year is approximately 150 million. And there is still more iron ore production projected to be on its way in subsequent years.

Vale SA posted a sharper decline in first-quarter profit than what analysts originally projected, selling their iron ore 25 percent cheaper than a market reference price, subsequently leading to a drop in shares.

“Vale's iron ore selling prices during the quarter were materially below our and consensus estimates. As iron-ore prices continue their decline, we expect Vale's earnings and share price to come under further pressure in the coming quarters," says Andreas Bokkenheuser, an equity analyst at UBS AG.

China: Vale’s Biggest Buyer

Much of Vale’s current woes are traced back to slowing economic growth in China. There is a significant amount of concern surrounding the declining prices of iron ore as it hinges on the health of Vale’s economic success in China. A drop of 21 percent this year to $US105.4 per metric ton has been reported for ore with 62 percent iron content delivered to the Chinese port of Tianjin.

Despite the slump in Chinese economic growth that occurred in the first quarter of this year, Vale maintains a positive outlook: "Demand is expected to absorb the incremental seaborne iron ore supply for the coming years with some partial dislocation of marginal iron-ore producers from the cost curve. We expect that the price in the second half would be better than the first half. Nothing is for sure but the price will not fall below $US110 on a sustainable basis."

Whether Vale’s Executive Director for Ferrous and Strategy Jose Carlos Martins ends up being correct in regards to this being a temporary issue largely depends on China’s policies which currently limit monetary expansion.

 

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May 18, 2021

Anglo American: FutureSmart Mining

Anglo American
Sustainability
Digitalisation
FutureSmart Mining
3 min
Anglo American is reimaging mining to improve people’s lives by leveraging technology, digitalisation and sustainability for FutureSmart Mining

Anglo American’s approach to technology, digitalisation and sustainability is changing the nature of the way the company mines. These are the step-change innovations that will transform the nature of mining – how the company sources, mines, processes, moves and markets its products – and how its stakeholders experience that business. Anglo American is transforming its physical and societal footprint with FutureSmart Mining.

FutureSmart Mining

“FutureSmart Mining is our innovation-led approach to sustainable mining,” Anglo American’s Tom McCulley told Mining Gllobal. In his role as CEO for Anglo American Peru & Group Head of Projects he has overseen investment of more than $5bn at the company’s Quellaveco copper project in Peru.

“These are the step-change innovations that will transform the nature of mining – how we source, mine, process, move and market our products – and how our stakeholders experience our business. It’s about transforming our physical and societal footprint.”

Technology

Anglo is undertaking a feasibility study to assess the possibility of rolling out one of its FutureSmart technologies, Coarse Particle Recovery (CPR), at Quellaveco. “CPR crushes particles to 2.5 times larger than normal, reducing energy consumption and mill time, leading to a 20% increase in throughput and 85% water recovery - a key issue in Peru given the concerns around water scarcity,” says McCulley.

“By allowing water to release from the much coarser particles, CPR will reduce the risks associated with wet tailings and ultimately help eliminate them altogether. When combined with low cost additives, it is possible to dewater residual waste and produce dry stackable tailings. This technology remains a focus area for us as water sent to tailings facilities often represents the largest water loss at a mine.”

Digitalisation

Quellaveco is going to be the first mine to run the FutureSmart operating model from day one. Anglo’s idea is to build a stable base on which it can layer new technologies, CPR being one of them. 

“We will also be a fully digital mine, which brings us future benefits in terms of understanding and applying changes in real time,” adds McCulley. “Our trucks and our drills will be automation-ready. We have taken the approach that, when we decide to move into an autonomous operation, no jobs will be lost, but the nature of some people’s jobs will have to change.”

Sustainability

FutureSmart is a blend of technology and sustainability,” said McCulley in an interview with Global Business Reports. “If you go back to the vision and design of Quellaveco, it has really been focused on the long-term sustainability of the mine through effective use of things like water, energy and the environment. Quellaveco has been focused on technology such as automation, with digital and analytical tools all coming together. We will be looking at future technologies to bolt on as we go to ensure that we are optimizing the sustainable use of resources and remaining cost-effective.”

Quellaveco

Anglo American’s Quellaveco copper project in Peru has created 15,000 jobs during construction and approximately 2,500 jobs are planned for operations, increasing Peru’s copper production by a forecast 300,000 tonnes per year. The mine’s first copper production is expected in 2022. To learn more about Anglo American's Quellaveco copper project read our feature here.

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