May 17, 2020

South Korean mine construction company takes a step back after A$1bn loss

Samsung C&T
Western Australian mining
South Korean constru
Dale Benton
2 min
South Korean mine construction company takes a step back after court A$1bn loss
Samsung C&Twill be taking a step back in its mine construction projects, as the company lost A$1bn on a recent Western Australian project.

The Sout...

Samsung C&T will be taking a step back in its mine construction projects, as the company lost A$1bn on a recent Western Australian project.

The South Korean company had completed work on the Roy Hill iron ore mine but is plagued with court battles including a lawsuit for A$65m in unpaid subcontracting work to the Spanish company Duro Felguera.

Samsung C&T stated that there is little market demand for mine construction projects, citing the current difficult climate in the commodities market.

The company won a US$5.6bn contract to build the Roy Hill mine in 2013.

Samsung C&T developed a processing plant to export iron ore produced from the Roy Hill mine, railroads and harbour infrastructure. The project ran over schedule and over budget, and in January Samsung C&T revealed that it would book a A$1bn loss on the contract.

In a number of court cases that the company is battling, Duro Felguera filed a lawsuit seeking A$65m payment for unpaid work at the iron ore mine.

“In total, Duro Felguera is owed well in excess of $100m by Samsung in relation to a $500m subcontract for work on Roy Hill,” said Raul Serrano, Duro Felguera operations director.

Samsung C&T said a judicial review on the payment disputes with Duro Felguera is pending and that it is taking all proper steps to resolve them in accordance with the law.

Analysts say the Roy Hill experience has eroded Samsung C&T’s appetite for mining projects.

“In the beginning, Samsung C&T was ambitious,” said Lee Kwang-soo at Mirae Asset Securities. “However in the course of working on the project, uncontrollable risks happened. So it seems difficult for Samsung C&T to expand further into mining in the future.”

Read the July issue of Mining Global Magazine!

Be sure to follow @MiningGlobal for news and latest updates.

Share article

May 8, 2021

Global iron ore production to recover by 5.1% in 2021

Iron ore
BHP
Anglo American
GlobalData
2 min
After COVID-19 hit iron ore output by 3% 2020, GlobalData analysis points to 5.1% uptick in 2021

Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected  to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.

Iron Ore

Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.

“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”

BHP

Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.

Anglo American

Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”

Share article