Fortescue Metals Signs Contract to Build Iron Ore Ships
Australia’s third-largest iron ore producer, Fortescue Metals Group, has signed a $275 million contract with a Chinese shipyard to build four specialist iron ore carriers. The deal will allow the company to cut costs and improve efficiencies as prices for the precious metal linger at two-year lows.
The four vessels, which will be much larger than the traditional Cape-size vessels, will be designed specifically for Port Hedland’s shallow harbor and tidal conditions. In addition to being larger, the ships will be capable of carrying 260,000 tons of iron ore, making them the biggest ships servicing the port.
According to Fortescue CEO Nev Power, the vessels will help maximize iron ore export volumes while also lowering freight costs.
"These vessels are a natural extension of our supply chain and will play a significant role in increasing efficiencies at the Port and lowering costs," Power said. "They also reflect and strengthen our close relationship with China, our largest customer."
The construction and delivery of the four ore carriers is expected to be delivered from November 2016 to May 2017.
Earlier this month Port Hedland announced more than one million tons of iron ore had been shipped in a single day, breaking the previous record by more than 160,000 tons.
Iron ore miners including Fortescue, BHP Billiton and Rio Tinto have been battling price slumps as iron ore prices have fallen to the lowest since 2012. The price has now fallen by almost 35 percent since December last year.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.