Asia’s Biggest Iron Deposit Found in China’s Liaoning Province

[ASAT]

By Bloomberg News

June 24 (Bloomberg) -- Asia’s biggest iron ore deposit, with reserves of more than 3 billion metric tons, was found in China’s northern province of Liaoning, according to a local government.

The Dataigou deposit, located near Benxi city, has material with iron content of between 25 percent and 62 percent, the Benxi government said in an e-mailed statement, confirming a China News Agency report. Deposits were found from 1.2 kilometers (0.7 miles) below ground to 2.015 kilometers.

China, the biggest buyer of iron ore, wants to lift output to reduce imports from Vale SA (http://www.bloomberg.com/apps/quote?ticker=VALE3%3ABZ), Rio Tinto Group and BHP Billiton Ltd. The deposit is deeper than any Chinese mines in production, according to Zou Jian (http://search.bloomberg.com/search?q=Zou+Jian&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a consultant and former chairman of the China Metallurgical Mining Enterprise Association.

“Production costs for this mine could be high because the deposit is very deep,” said Hu Kai (http://search.bloomberg.com/search?q=Hu+Kai&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), an analyst at Umetal Research Institute. “It can’t compete with Australian imports, which are cheaper because they have higher grades and are above ground.”

Angang Steel Co. (http://www.bloomberg.com/apps/quote?ticker=000898%3ACH), China’s second-largest listed steelmaker, rose 7.4 percent to close at 14.18 yuan in Shenzhen today. Baoshan Iron & Steel Co. (http://www.bloomberg.com/apps/quote?ticker=600019%3ACH), the largest mill, rose 3 percent to 7.20 yuan in Shanghai. Bengang Steel Plates Co. rose 10 percent, the daily limit, to 7.48 yuan in Shenzhen.

Angang Benefits

The find is “very long term good news for Angang,” Cazenove Asia Ltd. said in a note to clients. “Its parent already has the largest iron ore reserves in China, and this potentially doubles it.” The mine could start in four years, the note said.

The Anben Steel Group, parent of Angang and Benxi Iron & Steel Group, is the nearest steelmaker to the deposit, Zou said. Still, “it’s up to the central government to decide on whether to allow Anben to develop the mine,” he said.

Angang board secretary Fu Jihui (http://search.bloomberg.com/search?q=Fu+Jihui&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) and Benxi Iron and Steel Group’s spokesman Liu Dahong (http://search.bloomberg.com/search?q=Liu+Dahong&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said they didn’t have any information regarding the new deposit.

The deposit, which contains both magnetite and hematite ore, is equivalent to the combination of all the iron ore reserves in Liaoning’s Anshan and Benxi areas, today’s statement said.

The exploration team drilled 17 holes, of which 12 found iron ore. The area covered was about 4 kilometers in length and 3 kilometers in width, the statement said.

Higher Grade

Chinese underground deposits are typically between 500 meters and 600 meters deep, consultant Zou said. Mines in China have iron content of 20 percent to 40 percent, compared with over 60 percent for production by Vale, Rio Tinto and BHP Billiton (http://www.bloomberg.com/apps/quote?ticker=BHP%3AAU) at their projects in Brazil and Australia.
The cited iron content figures for the deposit suggest it’s “a high grade discovery for China,” Mark Pervan (http://search.bloomberg.com/search?q=Mark+Pervan&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a senior commodity strategist at Australia & New Zealand Banking Group Ltd., said in Melbourne.

“In global terms, that’s not very high grade. Brazilian ore has a grade of between 65 percent and 70 percent,” Pervan said. “But if they can reduce their reliance on high-cost iron ore imports and look for very low-cost domestic supply, that’s very positive for domestic steel mills.”

Foreign Imports

China has rejected a 33 percent price cut accord offered by Rio this year on contract iron ore and called for prices to drop as much as 45 percent because of losses by its steelmakers.

The nation’s reliance on iron ore imports may rise to 70 percent this year from about half in previous years, the Shanghai Securities News reported yesterday, citing Sinosteel Corp., the nation’s biggest iron ore trader.
Imports have jumped because of the closure of high-cost domestic mines, Vale said in April. Mines that started after 2005 are mostly unprofitable, China Metallurgical’s Zou said April 29. About one quarter to one third of mines in the country started before that period.

Last Updated: June 24, 2009 05:37 EDT

Source:http://www.bloomberg.com/apps/news?pid=20601086&sid=a3PsdjjKeKAI

[Ordie]

Coincidence:They annouce this news after the Rio Tinto Australia deal fell through and the US WTO suit accusing China for protectionism.

Bad: For N. Minnesota iron ore industry and locals in Manchuria who will be exposed to pollutants.

Good: At least we will not see as many missing manhole covers in Long Beach.

[Shuimo]

Coincidence:They annouce this news after the Rio Tinto Australia deal fell through and the US WTO suit accusing China for protectionism.

Bad: For N. Minnesota iron ore industry and locals in Manchuria who will be exposed to pollutants.

Good: At least we will not see as many missing manhole covers in Long Beach.
Why should you stubbornly claim that mining development has to conflict with the environment, Ordie?rofl

[Ordie]

Why should you stubbornly claim that mining development has to conflict with the environment, Ordie?rofl

Do what I did go to Northern Shanxi and see for yourself.

[Shuimo]

Do what I did go to Northern Shanxi and see for yourself.

I'went to Shanxi Province just last year!
Coal-induced Pollution does exist!rofl
Things I saw were nowhere near what you described as inhabtable and unlivable!:bash:
You don't have to take a tree for the whole wood!rofl

[Ordie]

I'went to Shanxi Province just last year!
Coal-induced Pollution does exist!rofl
Things I saw were nowhere near what you described as inhabtable and unlivable!:bash:
You don't have to take a tree for the whole wood!rofl

Drive between Datong and Taiyuen.

After two days I could not breathe.

[Shuimo]

Drive between Datong and Taiyuen.

After two days I could not breathe.

You are really good at exaggerating!rofl
How could you manage to get out live there and fly back to your paradise now sitting in front of you computer accusing us of poluting you, if you could not breathe in my Shanxi:slap::bash:?

[Rakki]

Net army alert!

Anyway, visit somewhere with GOOD air then you may finally realize just how bad the air quality is in parts of China.

[Ordie]

Net army alert!

Anyway, visit somewhere with GOOD air then you may finally realize just how bad the air quality is in parts of China.

Kunmming has good air quality.

[Ordie]

You are really good at exaggerating!rofl
How could you manage to get out live there and fly back to your paradise now sitting in front of you computer accusing us of poluting you, if you could not breathe in my Shanxi:slap::bash:?

I traveled between Datong to Pinyao via Taiyuan with my guide. We drove over 7 hours on "national roads" (two lane highways) so I could experience real life in rural China.

I've seen what pollution had done to the local environment and it woke me up to the realities of climate change.

Which affects all of us regardless of nationality or politics.

[Scriptable]

You are really good at exaggerating!rofl


http://img241.imageshack.us/img241/2759/datong.jpg

http://img386.imageshack.us/img386/7053/20090526air20pollution2.jpg

http://img205.imageshack.us/img205/6605/pollution1.jpg

http://img265.imageshack.us/img265/4441/pd1320954.jpg

[goat89]

Coincidence:They annouce this news after the Rio Tinto Australia deal fell through and the US WTO suit accusing China for protectionism.

Bad: For N. Minnesota iron ore industry and locals in Manchuria who will be exposed to pollutants.

Good: At least we will not see as many missing manhole covers in Long Beach.
You didn't fall in it did you Ordie? ;)

[Ordie]

Rising Ripoffs
Thefts of manhole covers increase as metals prices soar

Jamie Reno
Newsweek Web Exclusive
May 19, 2008 | Updated: 4:26 p.m. ET May 19, 2008
Three weeks ago 12-year-old Shamira Fingers from South Philadelphia was walking down a city street near her home when she suddenly fell into an open sewer hole. Frantic witnesses called 911, and rescue crews rushed to the scene, pulled her out and took her to Children's Hospital, where she was reportedly treated and released. Investigators say Fingers was very fortunate to escape serious injury or even death after falling six feet into an open manhole, the cover of which had been stolen. In the last year a staggering 600 manhole covers have been swiped by thieves in Philadelphia.
"We used to see a handful taken each year, but nothing like this," Martin McColl, inlet cleaning supervisor for the Philadelphia Water Department, tells NEWSWEEK. "We lost 12 of them just last night in the north Philadelphia area. I'm in absolute shock by what we've seen here over the past year."
Manhole thefts aren't exclusive to Philadelphia. Thousands of cast iron manhole covers in cities across the country have been pilfered in the past year. Chicago lost 200 in one month, with 40 reportedly taken in a single day. Seventy-five have been taken recently in Greensboro, N.C. More than 50 have been stolen in Long Beach, Calif., since January. And in Cherokee County, Ga., more than 30 have been taken in just the last two weeks.
The cast iron covers, which typically weigh between 100 and 200 pounds, are being taken by opportunistic thieves responding to the increased value of scrap metal and the burgeoning demand for recycled metals in China, India, South Korea and other developing nations. In 2001 scrap metal sold for $77 a ton. In 2004 it was $300 per ton, and today it's nearly $500. Stealing the covers is usually a two- or three-man operation, police say, in which the thieves yank the covers out of their holes with crowbars, throw them in the backs of vans or trucks, and take them to scrap metal yards, where they get only $10 to $20 per cover.
There have been few injuries reported to date, but this rash of thefts has created an obvious safety hazard for unsuspecting pedestrians like Fingers as well as for motorists and bicyclists. It's also costing municipalities big bucks. Replacing a single manhole cover costs as much as $500, including labor costs to cut the new cover in addition to the cost of materials. In Philadelphia, McColl says, most of the stolen covers are technically not over manholes but "inlets," which can be either circular or rectangular. The covers weigh an average of 40 to 60 pounds, and their theft has already cost the city more than $50,000.
Manhole cover theft is not an easy crime to stop. "It's tough to catch these thieves in the act," says Lt. Frank Valore of the Philadelphia Police Department. "But we're setting up stings; we're working on it. It's a high priority." In Long Beach, Calif., the cops are trying to catch a small group of aggressive thieves that has struck mostly in the alleyways in the southwest part of the city over the last several months. More than 50 manhole covers belonging to the Long Beach Water Department have gone missing since the beginning of the year (10 disappeared in just one day last week).
"We're taking this very seriously," says Lt. Gary Christensen, who heads the property crimes division of the Long Beach Police Department. "Imagine driving your car at 30 mph and hitting one of these holes. It can tear the wheel of your car right off and cause injury to the people in the car. Or riding your bicycle over one of them. And for a pedestrian this could be a fatal accident." Christensen says his department has broadcast information to recycling and scrap metal dealers and even attended the scrap metal association's regional meeting. But, he adds, "We need more help from the public. Our officers can't be in every alleyway and on every street and intersection."
So far, no arrests have been made in Long Beach, but there have been a few busts in other cities. An Indianapolis man's arrest ended a spree there that left more than 30 missing in late January. And police in Atlanta busted a large manhole cover ring in which three men had loaded a van with several covers and their frames. The three men were arrested and charged with interfering with government property and theft by receiving. "We got a 911 call from someone who saw someone throwing something into a manhole," says Maj. Joseph Harris of the Atlanta police. "We had an officer close by who was able to detain the three men. Inside their van the officer found a total of nine manhole covers and about the same number of frames, which weigh 200-plus pounds."
This epidemic is not just limited to manhole covers. It is tied into the overall problem of theft of recyclable metals—aluminum, copper, stainless steel, brass, etc.—all of which have increased in value as demand has risen. Virtually anything containing recyclable metal is at risk of being stolen—from catalytic converters (http://www.newsweek.com/id/88793) in cars to copper pipes in homes. Even beer kegs. The beer industry estimates that it is losing some $50 million in stolen stainless steel kegs every year.
Cities across the country have enacted, or are considering, metals theft legislation. But the resulting patchwork of statutes has resulted in a set of poorly written laws that are unenforceable and ineffective and that unnecessarily harm recycling, suggests Frank Cozzi, outgoing chair of the Institute of Scrap Recycling Industries (ISRI), the industry's largest trade organization. Cozzi says his organization has worked diligently to educate scrap metal and other recyclers about the theft problem and to urge that dealers comply with the law.
"Metals theft has become a huge problem all over the world," says Cozzi. "As a trade association with representatives from 35 countries, we've been dealing with this for a few years, but it has definitely gotten worse in last year or so as a result of the high demand from China and India and other countries."
Cozzi's association has teamed up with the crime prevention organization group McGruff the Crime Dog, implemented ISRI scrap theft alerts, and made recommendations to members to reject stolen material. In a strongly worded letter on ISRI's Web site, Cozzi urges scrap dealers to take the high road and not purchase stolen material. But many scrap dealers—even the ones who are not buying the manhole covers—are resisting efforts to cooperate with police. The argument commonly heard from the scrap metal dealers is that it's sometimes impossible to differentiate stolen items from legal ones. They fear regulation, retaliation and prosecution, says Cozzi, who is trying to get his members to stop talking to their lawyers so much and start talking to police.
Meanwhile, cities face an uphill battle fighting this crime wave. Officials in Philadelphia have begun attaching locks to the covers. About 25 percent of the city's covers are now locked down. But that's a time- and labor-intensive process. In Philadelphia, the city hit hardest by this problem, city water officials and the police are urging the public to report any missing manhole covers and, if they see anyone stealing one, to please call 911 immediately so that there are no more accidents like the one that befell little Shamira Fingers. Says McColl, "We're making progress. But we have a long way to go and we really need the citizens' help."

URL: http://www.newsweek.com/id/137822


Coincidently, China Overseas Shipping Company (COSCO) has its major shipping terminal at the former naval base in Long Beach.

[Eztyga]

Hmmm, probably not too good news for Australia's iron ore export market.

@Shuimo, you have probably developed leather bags for lungs, but for those of us from clean air environments, China is a challenge.

[goat89]

Hmmm, probably not too good news for Australia's iron ore export market.

@Shuimo, you have probably developed leather bags for lungs, but for those of us from clean air environments, China is a challenge.
Dad told me about this too haha! Good old Singapore might get smog from Indonesia, but certain parts of China is just bad. Sometimes worst than Bangkok. ><

[acosta]

pics remind me of west virginia coal mining and even 20th century Pittsburgh

[boone]

Hmmm, probably not too good news for Australia's iron ore export market.

How many years of easy-access ore does Australia have left to be mined?
I'd wager quite a few before it became cost effective for China to exploit their recent "discovery"

[Eztyga]

How many years of easy-access ore does Australia have left to be mined?
I'd wager quite a few before it became cost effective for China to exploit their recent "discovery"

Well, I have been to Dampier in NW Australia, and the rocks on the surface rust, sooo...

[Shuimo]

Kunmming has good air quality.
Kunming is nicknamed as the City of Spring!
We have plenty of super cute cities with good and clean air and environemnt!rofl

Lijiang, Lhasa, Guilin, Zhangjiajie, Zhuhai, Weihai, Guiyang, Dalian, Qingdao......................................to name just a fewrofl

[Shuimo]

I traveled between Datong to Pinyao via Taiyuan with my guide. We drove over 7 hours on "national roads" (two lane highways) so I could experience real life in rural China.

I've seen what pollution had done to the local environment and it woke me up to the realities of climate change.

Which affects all of us regardless of nationality or politics.

Your means of travling really unusual!rofl
7 whole hours on a coach! By choice or necessity?rofl

I had a taste of that when I got back from Pingyao to Taiyuan by bus on these National Roads so as to catch the train in the provincial capital to bring me back to Beijing!rofl

I certainly know how thirstily the local soil of Shanxi dies for water and rain!rofl

WHat a balck coat of these houses wear!rofl

BUt then the local people still live a bustling life of relative affluence!rofl

My conclusion: All this has less to do with the local mining than the climate change itself! :bash:

[Shuimo]

http://img241.imageshack.us/img241/2759/datong.jpg



http://img386.imageshack.us/img386/7053/20090526air20pollution2.jpg


http://img205.imageshack.us/img205/6605/pollution1.jpg


http://img265.imageshack.us/img265/4441/pd1320954.jpg

When were these pics taken?rofl

[Shuimo]

Hmmm, probably not too good news for Australia's iron ore export market.

@Shuimo, you have probably developed leather bags for lungs, but for those of us from clean air environments, China is a challenge.

Oh, I live in Beijing with rather comfortable environment, except for the bad traffic and overcrowdedness!rofl

[Ordie]

Your means of travling really unusual!rofl
7 whole hours on a coach! By choice or necessity?

By choice in a private car and with a local guide. I prefer to travel independently off the beaten track traveled by tourists.


My conclusion: All this has less to do with the local mining than the climate change itself!

Actually the local coal fuels the local steel foundaries and powerplants providing power to Beijing. The heavy coal particulates spews up into the atmosphere and blocks heat thus causing temperature to rise.

Thus melting the ice caps as well as the Tibetian Glaciers at an alarming rate to the point it affects the water supply to Asias great rivers including the Yangze, Yellow, Irrawaddy, Ganges, and Mekong Rivers. Thus affecting several billion people.

[Shuimo]

By choice in a private car and with a local guide. I prefer to travel independently off the beaten track traveled by tourists.



Actually the local coal fuels the local steel foundaries and powerplants providing power to Beijing. The heavy coal particulates spews up into the atmosphere and blocks heat thus causing temperature to rise.

Thus melting the ice caps as well as the Tibetian Glaciers at an alarming rate to the point it affects the water supply to Asias great rivers including the Yangze, Yellow, Irrawaddy, Ganges, and Mekong Rivers. Thus affecting several billion people.

ReaD THIS:
Obama insists on the historic plan of rescuing the world from global warming, even though politicians and scientists deny it exists.

Published: June 24, 2009 11:01h

Australian Family Minister Steve Fielding has concluded that there is not enough evidence of global warming. He has consulted scientists, as well as the government. He has prepared documents which prove his claims, although his opinion cannot be crucial for the cabinet`s plans.

- Global temperature isn`t rising – Fielding concluded, adding that he did not wish to risk loosing employment posts, which would happen if factory drives that supposedly affect global warming by emitting gas are closed down.

Senator Nick Xenophon said that the Senate`s decision on plans for global warming should be postponed until August, in order for all proposals to be considered.

Obama is trying to pass a historic plan
But creating an ideology pegged to carbon dioxide is a dangerous nonsense. The present alarm on climate change is an instrument of social control, a pretext for major businesses and political rattle.
Delgado Dominos, Portuguese environmentalist

On the other hand, American President Barack Obama and his Democrats are trying to pass a “historic plan” for the struggle against global warming.

Obama is planning to secure independence for the USA when it comes to the import of oil and to oppose gas emission and the destruction of air, which threatens the planet. Obama`s bill could be adopted on Friday already and then it will be presented to the Senate.

According to the bill, gas emission should ne cut back by 17 percent until 2020 and by 83 percent until 2050. The auto industry is to be aided with 8 billion dollars in order to stimulate production of electric vehicles which do not emit gas.

Republican Jim Sensenbrenner asked the Justice Department to look into whether General Motors and Chrysler can legally lobby for the anti-global warming plan. General Motors is a member of the Climate Action Partnership, which supports the law on fighting global warming.

“Fear of global warming is one of the biggest scientific scandals”

Last year, 650 esteemed world scientists opposed the climate changes myth presented by Nobel award winner Al Gore and the UN board for climate changes. They declared the global warming claims as unfounded.

- The promotion of such fears of global warming is the worst scientific scandal in the history. When people come to know what the truth is, they will feel deceived by science and scientists - awarded Japanese chemist dr. Kominori Itoh said last year.

- But creating an ideology pegged to carbon dioxide is a dangerous nonsense. The present alarm on climate change is an instrument of social control, a pretext for major businesses and political rattle - professor Delgado Dominos, Portuguese environmentalist said.

In 1997, all members of the European Union ratified the Kyoto Protocol, focused on decreasing greenhouse gas emissions.

At the start of December last year, a UN conference was held with the purpose of presenting guidelines for a new agreement on climate changes, seeing how the Kyoto`s term was slowly, but surely, coming to an end.

http://www.javno.com/en-world/global-warming-myth-is-tearing-the-world-apart_267284

[Scriptable]

ReaD THIS:

Australian Family Minister Steve Fielding has concluded that there is not enough evidence of global warming.
Steve Fielding, a right wing religious nut, is leader of the Family First Party which is the major force behind advocacy of internet filtering in Australia. Mr Fielding is not at all qualified in anything related to climate science. He is widely considered to be in way over his head.

[Shuimo]

Steve Fielding, a right wing religious nut, is leader of the Family First Party which is the major force behind advocacy of internet filtering in Australia. Mr Fielding is not at all qualified in anything related to climate science. He is widely considered to be in way over his head.
This merits concern!
Last year, 650 esteemed world scientists opposed the climate changes myth presented by Nobel award winner Al Gore and the UN board for climate changes. They declared the global warming claims as unfounded.

[Scriptable]

This merits concern!
Last year, 650 esteemed world scientists opposed the climate changes myth presented by Nobel award winner Al Gore and the UN board for climate changes. They declared the global warming claims as unfounded.
No it doesn't. The facts on that "list":


1. The claims of a list of 650 prominent scientists are wrong.

This list is an expansion of a list of 400 that Inhofe produced in 2007. Unfortunately many on this list are economists, some are weather people on television, some do not deny climate change (for example the inventor Ray Kutzweil completely believes climate change is human caused but thinks we will solve the problems it causes in the near future via nanotechnology) and others are scientists but not in climate science.

More troubling is that some do not want to be on the list. Geoge Waldenberger, meteorologist requested to be removed from the 2007 list and is included on the 2008 list anyway (http://climateprogress.org/2008/12/11/inhofe-morano-recycles-long-debunked-denier-talking-points-will-the-media-be-fooled-again/). Erich Roekler, of the Max Planck Institute is misquoted and clearly, from his other writings does not belong on a list of dissenters. Luc Debontridder of Belgium has already protested that he was misquoted.


In contrast: Numerous scientific groups, including The American Meteorological Society, the American Geophysical Union, and the American Association for the Advancement of Science, have issued statements arguing that human-caused global climate change is real. These statements have to be voted on by their organizations’ membership, and consequently represent the opinions of large groups of scientists.

The American Meteorological Society alone has 14, 000 members. Its statement can be found here: http://www.ametsoc.org/policy/2007climatechange.html

The American Geophysical Union (50,000 members of whom approx 36% are from 130 other countries) has a statement here: http://www.agu.org/sci_soc/policy/positions/climate_change2008.shtml.


In 2005, The National Academies of 11 countries (the G 8 countries as well as Brazil, China, and India) issued a joint statement that climate change is real and human-caused, and that it should be the subject of efforts at a solution.

Inhofe claims that 650 scientists is “12 times the 52 scientists” that authored the IPCC summary for policymakers in 2007. While this is true, 650 is much fewer than the 2500 scientists that authored the whole IPCC report.

Thus Inhofe’s pulling together a list of 650 scientists, some of whom are not scientists and some of whom do not actually agree with the statement, is not impressive.

So we're talking 64,000 real climate experts vs. a few hundred economists and TV weather girls. Climate change is real despite the lies put out by people who make these pointless and dishonest lists.

[Jaegermeister + Red Bull]

Hmmm, probably not too good news for Australia's iron ore export market.

@Shuimo, you have probably developed leather bags for lungs, but for those of us from clean air environments, China is a challenge.

I wont be worried a bit. This iron ore debate is getting old, and I hope to clear things up a bit at least here on mp.net...

From the Australian perspective...

Fact: Iron ore prices, despite collapsing spectacularly last year is still on historical highs and above trend levels.

Fact: The spot price has fallen below the contract price, but not by much.

Fact: The contract price for 2009 may fall back to 2008 negotiated levels, depending on the outcomes of the negotiations. While this may seem large (-50%), the 2008 level is still twice the price level of 2006, and 2006 is twice the price level of 2005, and 2005 was 50% higher than 2004, when the just expired resource boom began.

Fact: Since the GFC, while price have fallen, other than the few months it fell slightly, volume (of ore sold to China) has been sustained and even gone up.

Fact: A 3rd force in iron ore, FMG, has successfully begin shipping iron ore to China and is now a established player. Despite the doom and gloom all around.

Fact (Slightly OT): Coking coal and even thermal coal, products Australia hardly ever export to China, is increasingly being bought by Chinese traders, offsetting some of large cuts by Japan, Korea and European customers.

Fact: Australian iron ores exports are mostly fines, refined and processed stuff ready for the furnace with high iron content and low impurities. Brazilian iron ore exports are mainly lumps, while cheaper and higher in iron content, are harder to refine and process and contains more crap.

http://en.wikipedia.org/wiki/Iron_ore


Magnetite concentrate grades are generally in excess of 63% Fe by weight and usually are low phosphorus, low aluminium, low titanium and low silica and demand a premium price.

However, Hematite ores are harder than magnetite ores and therefore require considerably more energy to crush and grind if benefication is required. Hematite ores can also contain significantly higher concentrations of penalty elements, typically being higher in phosphorus, water content (especially pisolite (http://en.wikipedia.org/wiki/Pisolite) sedimentary accumulations) and aluminium (clays (http://en.wikipedia.org/wiki/Clay_mineral) within pisolites). Export grade Hematite ores are generally in the 62-64% Fe range.


Fact: Transportation cost - Australia is a lot closer to China than Brazil and even India.

From the Chinese perspective...

Fact: Since the price collapse, Chinese domestic iron ore production has collapsed even more due to the much higher cost of domestic production.

http://www.theaustralian.news.com.au/business/story/0,28124,25627956-5001641,00.html

http://seekingalpha.com/article/144964-chinese-iron-ore-producers-face-uncertain-future

Fact: For all the hard talk, China's own iron ore production cannot survive on even the 2008 level contract price. Without high spot prices most mines will shut down. The same goes for coal.

Fact: Iron ore deposits in China are lower grade, and have a lot of containments and inpurities...on the plus side its why China has 60% of the world rare earth elements and minerals reserves.

Fact: There is still a lot of infrastructure left to build in China. 40,000kms of new railway tracks for example by 2020.
http://online.wsj.com/article/BT-CO-20090619-714375.html

http://www.forbes.com/feeds/afx/2009/06/25/afx6584422.html

Fact: While the rest of the world's demand have fallen around 30% for iron ore, China is looking to reduce around 10% of capacity for steel, from over 500million to around 450million tons. And it is building up stockpile while prices have fallen and remain low...for now.

The verdict? China seeks secure supply and price stability, ie. guaranteed volume and sustained appreciation of agreed price, not the doubling of the price every years for the last 4 years. The medium to long term projections are still for sustained infrastructure growth, and anyone that tells you China has too much infrastructure already is a retard. Take for example using 2020 as a benchmark, whatever that was built (which is not many) in the 50s will be nearing 70years old, and things built in the 70s and 80s will be nearing 50yrs old...most infrastructure is built around the mid 90s to mid 2000s, by which time avg age of infrastructure is around 15 to 20years old. I see another round of development post 2020...

Australian companies seek to expand the supply to meet the demand and have been largely more or less successful, but have been unrealistic in their price growth expectations, duration of and the momentum of the "greatest resource boom in history". This country needs low cost easily accessed capital to develop. Just look at what happened to OZ Mineral, the bank pulled the plug on a viable vehicle simply because they got cold feet.

The future of iron ore sea borne trade is in volume, not price.