Iron Ore.

Export of Iron Ore :: Export of Coal

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4), hematite (Fe2O3), goethite (FeO(OH)), limonite (FeO(OH).n(H2O)) or siderite (FeCO3). Ores carrying very high quantities of hematite or magnetite (greater than ~60% iron) are known as “natural ore” or “direct shipping ore”, meaning they can be fed directly into iron-making blast furnaces. Most reserves of such ore have now been depleted. Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel. 98% of the mined iron ore is used to make steel.[1] Indeed, it has been argued that iron ore is “more integral to the global economy than any other commodity, except perhaps oil”.

Countries such as Canada, Australia, Brazil, etc. are blessed with plenty of natural resources and they are big exporters of commodities such as Natural Gas, Iron Ore, and Coal. In this post, let us take a look at the top five coal and iron ore exporters and importers in the world.

Coal Statistics

Coal provides 29.6% of global primary energy needs and generates 42% of the world’s electricity.

Direct, Sellers of Iron Ore :: Direct, Sellers of Coal

Green Earth Systems, South Africa has been exporting Iron Ore in conjunction with Green Earth Systems Egypt. The most difficulty has been in the shipping. South Africa has been limited to Port use and Epypt with unloading vessels.

With 2012 in mind and better relationship improvements have been made to see 100% success

World production of iron ore fell by 6.2% in 2009 to 1.6 billion tons. This was the first fall in production after seven years` consecutive growth period. Output decreased in most countries, with a few notable exceptions such as Australia and South Africa but this was not enough to stop the fall. China which used to be the largest producer has now been pushed down (on the converted iron ore content basis) to fourth place at 234 Mt, after Australia at 394 Mt, Brazil at 300 Mt, and India at 257 Mt.

World crude steel production decreased from 1326.6 Mt in 2008 to 1219.0 Mt in 2009, a dramatic fall of -8.1 %. But while most of the world saw falling production, crude steel production in China increased by 13.5 %, compared to the 2.3 % growth the year before. China now accounts for almost half of the world production of crude steel (47 %). In 2010, Chinese steel production drives growth, but there has been some growth in most other large producing countries as well, compared to 2009. If the production rate of the first four months of 2010 continues, the total output of crude steel in 2010 will be somewhere around 1410 Mt (similar to the record year of 2007). The latest World Steel Association’s short term forecast for world steel use anticipates a rise in steel use by 10.7 % in 2010.

Despite the recession, iron ore trade reached a new record level in 2009 as exports increased for the eighth year in a row and reached 955 Mt, up 7.4 % compared to 2008. The increase was the result of higher demand in China combined with a fall in domestic production.

The annual bench mark negotiation process was finished in early 2010. In spite of vocal opposition mainly from Chinese steel companies, with strong support from Japanese and European steel industry organisations, there was nothing that could make it survive. A quarterly semi-negotiated price is now the norm. The new model has brought uncertainty and reduced the transparency of the iron ore market. Prices are no longer announced like they used to be and the published series of spot prices are still not 100% reliable.

The three largest iron ore companies, Vale, Rio Tinto and BHP Billiton increased their control over global iron ore production to 35.4 % in 2009 (34% in 2008). The “Big Three” control 61% of the world seaborne trade of iron ore. New iron ore mining capacity taken into operation in 2009, reached almost 75 Mt globally.

The world iron ore market will be characterized by tight conditions and the next few years – by a gradual adaptation of supply, by way of addition of new capacity, to a continuously growing demand. Accordingly, we believe that supply will gradually catch up and that prices will decline from the present extreme levels, but will stay at a higher level than in the period before 2008.

Mr Adhir: Talks about about Iron Ore,

Iron ore is a mineral substance which, when heated in the presence of a reductant, will yield metallic iron (Fe). It almost always consists of iron oxides, the primary forms of which are magnetite (Fe3O4) and hematite (Fe2O3).

Iron ore is the source of primary iron for the world’s iron and steel industries. It is therefore essential for the production of steel, which in turn is essential to maintain a strong industrial base. Almost all (98%) iron ore is used in steel making. Iron ore is mined in about 50 countries. The seven largest of these producing countries account for about three-quarters of total world production. Australia and Brazil together dominate the world’s iron ore exports, each having about one-third of total exports.

In the past few years, Australia has benefited from unprecedented global demand for minerals and commodities, mostly driven by the growth of the Chinese economy and the surging demand from its steel industry for additional supplies of high-quality iron ore. This is driving increasing expenditure on minerals exploration and record investment in mining and minerals processing projects in Australia. While Australia offers many advantages for investors, the market potential within Australia in particular, but also in the Asia Pacific region, is a strong driver for establishing operations in Australia.

Australia’s iron ore industry is export oriented (over 90 per cent exported) and is dominated by BHP Billiton and Rio Tinto’s wholly-owned subsidiary, Hamersley Iron, in the Pilbara Region of Western Australia. Other important local iron ore projects include Koolyanobbing, Cockatoo Island, Tallering Peak, Koolanooka, Jack Hills, and Koolan Island, Middleback Ranges in South Australia, Frances Creek in Northern Territory and Savage River in Tasmania.

In 2007, Australia had some 13 per cent of world EDR of iron ore and was ranked fourth after Ukraine (19 per cent), Russia (16 per cent), and China (14 per cent). In terms of contained iron, Australia has about 15 per cent of the world’s EDR and is ranked second behind Russia (19 per cent). Australia produces around 16 per cent of the world’s iron ore and is ranked third behind China (32 per cent) and Brazil (19 per cent) (Source: Geoscience Australia, Australia’s Identified Mineral Resources 2008).

Western Australia has about 99 per cent of Australia’s Economic Demonstrated Resources (EDR) of iron ore, with about 89 per cent occurring in the Pilbara district. In 2007 EDR increased by 8.9 per cent to 20.3 gigatonnes (Gt), due to the inclusion of Marillana, Mungada, Phils Creek and Red Hill-West Pilbara for the first time and large increases at the Cape Lambert deposit and the undeveloped Rio Tinto deposits. Magnetite ore currently constitutes 24 per cent (4.8Gt) of Australia’s EDR. At current production levels the resource life of accessible EDR exceeds 65 years (Source: Geoscience Australia, Australia’s Identified Mineral Resources 2008).

Australia’s iron ore production in 2007 was 299.1 million tonnes (Mt), (275.1Mt in 2006). Virtually all of Australia’s iron ore is mined in Western Australia (around 97 per cent), with most of this product being exported. Small quantities of iron ore are mined in South Australia (around 2.5 per cent of total output), with production being dedicated to the domestic steel industry. The importance of South Australia has increased since 2006-07, due to a decision by OneSteel to develop and mine a magnetite iron ore resource in that state. The output is used by the company in its steel making operations. Iron ore is also mined at Savage River in Tasmania and is processed into iron ore pellets (Source: IbisWorld, Iron Ore Mining in Australia, October 2008).

In 2008-09, Australia’s iron ore production is forecast by ABARE to reach about 327Mt.

The volume of Australian iron ore exports has increased steadily since 2003, with the value of exports increasing dramatically (reflecting dramatic price increases from 2003 to 2008). In 2008-09, the value of iron ore exports is forecast to increase by 52 per cent to $31.0 billion, mainly reflecting the effects of high contract prices in place until March 2009 (Source: ABARE, Australian Commodities, Vol 15, No. 4, December Quarter 2008).

In 2007 exports of iron ore products totalled 267.2Mt (248.4Mt in 2006), with a value of A$16 billion. Five markets account for virtually all of Australia’s iron ore exports: China (60 per cent), Japan (25 per cent), South Korea (10 per cent), Taiwan (3 per cent) and the European Union (2 per cent) (Source: ABARE, Australian Commodities, Vol 15, No. 4, December Quarter 2008).

greenearthsystems ironore 2

India’s major state-owned ports shipped only 480 million tons of iron ore in November, a decline of 35.4 per cent from a year ago. Iron ore shipments through Paradip, one of the largest ports on India’s east coast in Orissa, plummeted 88.4 per cent to 148.6 million tons. Iron ore exports through Visakhapatnam port likewise fell 35.7 per cent to 93.3 million tons.

South Africa exported 30.336-million tons of iron ore in 2007, which represents an increase of 16 percent year- on-year.The bulk of the imports went to China, which received 11.772-million tons or 38.8 percent of South Africa’s total iron ore export tonnage.Japan imported 6.57-million tons of iron ore from South Africa, accounting for 21.7 percent of the total export tonnage.

Imports to Germany, the third-largest export destination for South African iron ore, climbed 54.8 percent to 5.658-million tons or 18.7 percent of the total.Source: http://www.miningtopnews.com/south-africa-iron-ore-exports-up-16.html

South Africa exported 30.336-million tons of iron ore in 2007, which represents an increase of 16 percent year- on-year.The bulk of the imports went to China, which received 11.772-million tons or 38.8 percent of South Africa’s total iron ore export tonnage.Japan imported 6.57-million tons of iron ore from South Africa, accounting for 21.7 percent of the total export tonnage.

Imports to Germany, the third-largest export destination for South African iron ore, climbed 54.8 percent to 5.658-million tons or 18.7 percent of the total.Source: http://www.miningtopnews.com/south-africa-iron-ore-exports-up-16.html

Brazil gets bigger ships to challenge Australia’s iron ore exports

Australia’s dominance of the Chinese iron ore market is about to be challenged on the high seas.

The largest bulk carriers of iron ore currently in use in Australia are the capesize ships, which can carry 150,000 tonnes.

However Brazil, the largest iron ore producer in the world, has commissioned ships capable of carrying more than twice that amount, reducing freight rates and making its exports cheaper.

Lou Russell, CEO of peak shipping industry body Shipping Australia, says 50 of these leviathans are on order.

“They are about 400 metres long and they can probably carry up to around 400,000 tonnes of cargo, but they hope by employing these massive giant ships to reduce the rate per tonne of cargo carried, to a point where it is more competitive with Australia.”

* Soy, corn harvest starting to peak, exports to pick up * Iron ore exports higher but Carnival may have slowed trade SAO PAULO, March 1 (Reuters) – Brazilian sugar, soybean, coffee and iron ore exports rose in February from January, the Trade Ministry said on Thursday in its monthly commodities export report. Brazil’s soy and corn harvest is just about to peak with the flow of grain through the ports to pick up in the coming weeks. Brazil’s sugar and coffee harvests are still months away. February’s Carnival holiday also slowed business in Brazil. Iron ore shipments recovered slightly in February after falling sharply in January when Brazil’s Vale, the world’s No. 2 miner, declared force majeure due to rain that halted shipments from one of its iron ore systems. BRAZIL MONTHLY COMMODITIES EXPORTS COMMODITY EXPORTS FEB 2012 JAN 2012 FEB 2011 COFFEE (60KG BAG) 1.99 MLN 1.95 MLN 2.08 MLN SOYBEANS (TNS) 1.57 MLN 1.01 MLN 663,800 SOYMEAL (TNS) 996,800 1.05 MLN 697,700 SOYOIL (TNS) 93,000 87,600 65,200 CORN (TNS) 279,200 852,500 553,300 FCOJ (TNS) 170,000 176,500 143,300 SUGAR RAW (TNS) 1.024 MLN 950,700 979,900 SUGAR WHITE (TNS) 316,200 280,400 416,900 PULP (TNS) 766,500 733,900 685,800 ALUMINUM (TNS) 58,700 37,200 69,700 STEEL FLATROLL (TNS) 119,100 104,100 249,200 IRON ORE (TNS) 22.65 MLN 18.18 MLN 23.42 MLN FUEL OILS (TNS) 771,800 583,400 655,500 CRUDE OIL (TNS) 2.37 MLN 2.19 MLN 2.43 MLN COTTON LINT (TNS) 57,900 52,700 28,300 ETHANOL (LTR) 80,700 88,600 104,300

Coal Statistics

Coal provides 29.6% of global primary energy needs and generates 42% of the world’s electricity

Dr. Vinny Pilly, Talks about Coal and Global Energy

Total Global Coal Production (including hard coal and lignite)

  • 7229Mt (2010e)
  • 6823Mt (2009)
  • 4677 (1990)

Total Global Hard Coal Production

  • 6185Mt (2010e): 891Mt coking coal, 5294Mt steam coal
  • 5789Mt (2009): 782Mt coking coal, 5007Mt steam coal
  • 3493Mt (1990): 598Mt coking coal, 2894Mt steam coal

Top Ten Hard Coal Producers (2010e)

PR China 3162Mt Russia 248Mt
USA 932Mt Indonesia 173Mt
India 538Mt Kazakhstan 105Mt
Australia 353Mt Poland 77Mt
South Africa 255Mt Colombia 74Mt

In 2010, world hard coal production increased by 6.8%, compared to 1.8% in 2009. It continued to be driven by growth in production from the non-OECD countries with 8.4%

Total Global Brown Coal/Lignite Production

  • 1042Mt (2010e)
  • 1033Mt (2009)
  • 1184Mt (1990)

Top Ten Brown Coal Producers (2010e)

Germany 169Mt USA 65Mt
Indonesia 163Mt Greece 56Mt
Russia 76Mt Poland 56Mt
Turkey 69Mt Czech Republic 44Mt
Australia 67Mt Serbia 37Mt

Brown coal production in the OECD countries continued to decline while non-OECD brown coal production rose to a record level, led by Indonesia which accounted for over 75% of global incremental growth.

Top Ten Coal Consumers (2010e)

PR China 2516Mtce South Africa 141Mtce
USA 733Mtce Germany 105Mtce
India 434Mtce Korea 103Mtce
Russia 177Mtce Poland 87Mtce
Japan 165Mtce Chinese Taipei

Coal & Steel

Approximately 13% (around 717Mt) of total hard coal production is currently used by the steel industry and over 60% of total global steel production is dependent on coal.

International Hard Coal Trade

Steam Coking Total Trade
1990 297Mt 199Mt 496Mt
2000 402Mt 183Mt 585Mt
2010 676Mt 262Mt 938Mt

Development of Seaborne Trade

(Source: SSY - www.ssyonline.com)

Steam Coal Coking Coal
Atlantic Pacific Atlantic Pacific
1986 74Mt 59Mt 61Mt 81Mt
1996 125Mt 139Mt 70Mt 103Mt
2009 196Mt 433Mt 53Mt 164Mt

Top Coal Exporters (2010e)

Total of which Steam Coking
Australia 298Mt 143Mt 155Mt
Indonesia 162Mt 160Mt 2Mt
Russia 109Mt 95Mt 14Mt
USA 74Mt 23Mt 51Mt
South Africa 70Mt 68Mt 2Mt
Colombia 68Mt 67Mt 1Mt
Canada 31Mt 4Mt 27Mt

Top Coal Importers (2010e)

Total of which Steam Coking
Japan 187Mt 129Mt 58Mt
PR China 177Mt 129Mt 48Mt
South Korea 119Mt 91Mt 28Mt
India 90Mt 60Mt 30Mt
Chinese Tapei 63Mt 58Mt 5Mt
Germany 46Mt 38Mt 8Mt
Turkey 27Mt 20Mt 7Mt


(e = estimated) (Mt = Million tonnes)

SOURCE: Wikipedia/minerals.usgs.gov/austrade.com.au/abc.net.au/reuters.com/worldcoal.org/Sources: BPIEAWorld Steel AssociationSSYWEC

From the above table, we can infer that China is the largest producer and consumer of coal (thermal and coking) in the world. This is due to the heavy industrialization taking place in China in recent years. Nearly 75% of thermal coal in the world is produced and consumed by China, the USA and India since the demand for coal is high in these countries. In the USA, coal is still the major resource for generating electricity. Despite the movement to go green, coal will continue to the main source for electricity production in the USA for many years to come as per a report by the Energy Information Administration.

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