Glencore looks to Mine and Market Iron Ore
Iron ore is a key ingredient in manufacturing steel, and Glencore International PLC has been an integral player in marketing the commodity around the globe. However, the company is now considering becoming an iron ore miner itself.
"There's no reason why we shouldn't be a miner," says CEO Ivan Glasenberg. "We have always said we wish to grow the iron ore business since it" became a spot tradeable business.
Glencore owns 34.5 percent of mining company Xstrata PLC. The companies have commercial agreements for Glencore to market nickel and zinc produced by Xstrata, and Glencore has been reported as stating it would consider entering into marketing deals for iron ore produced by Xstrata. But Glasenberg notes, "we have a close relation but there is no reason to say they are the miner and we are the marketer... If opportunities present themselves, we will become the miners."
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Glencore already has several commercial agreements for marketing iron ore in Australia, Sierra Leone and the U.S. to name just a few regions. The company this week agreed to purchase 48 percent of Australian iron ore miner Mount Gibson Iron Ltd.’s output from its upcoming Extension Hill mine. In January the company formed an offtake agreement with London Mining PLC for ore from its Sierra Leone mine. The deal will see the transfer of 9.5 million tons of iron ore over a five-year period.
Glencore also entered into an agreement with U.S.-based Wings Enterprises Inc. to jointly develop an abandoned magnetite mine in Missouri. The mine will yield rare earth elements and iron ore, for which Glencore will have exclusive marketing rights.
Glencore’s interest in entering the iron ore mining sector will diversify the company’s offerings. Considering its position as one of the world’s leading ore marketers, it shouldn’t have a problem getting the ore out of the ground and into the market relatively quickly.
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.