Fortescue Metals Chief Sees Opportunity in Iron Ore Future
Despite the company’s 23 percent fall in share price on Wednesday, Fortescue’s chief Nev Powers still sees immense opportunity in iron.
The Australian-based iron ore miner made record shipments of the steelmaking ingredient in the March quarter with 31.5 tons, up by half from the last time last year. Powers isn’t concerned about market shares and said short-term factors were behind the falls, and Fortescue was “continuing to focus on improving our cost position …I’m not at all concerned about where the price is.”
Powers believes China’s demand for steel is still strong regardless of price volatility. The China steel company Baosteel recently issued a big vote of confidence in iron ore by lobbing a joint $1.42 billion bid this week for Perth junior Aquila Resources.
According to Powers, the bid was reaffirming and a positive one and highlights revived Chinese interest in the Australian resources sector. ''It shows a lot of confidence by China in the Pilbara and in Australia generally. There has been concern for a while about the level of investment China has made in the iron ore industry … this shows a change to that policy and I think it is very positive,'' Power said.
China’s economy began rather slow at the start of the year according to official figures, but was still stronger than expected.
“What we’re seeing already in this first quarter of 2014 is continuing strong growth n iron ore demand from China, so at the moment it’s continuing to absorb any increase in supply,” Powers said.
The company has also begun exploring additional options, including supplying customers in South Korea, Japan and other Asian markets.
In addition, the company’s repayment of debt as well as operational and scale efficiencies have reduced the company’s break even cost, meaning it can absorb more fluctuations in the iron ore price better than last year.
Last month Fortescue completed its $9.2 billion mine expansion, allowing it to produce its long held target of 155 million tons of iron ore a year.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.