IM-21 in Budapest: congress celebrates coming-of-age

Abstract

Steel is an alloy of iron and carbon that is vital to the global economy. Its unique combination of strength, formability, versatility, recyclability, and low cost make it an ideal material for the construction industry, shipbuilding, motor vehicle manufacture, railway construction, bridge building, heavy industry, machinery manufacture, and engineering applications. The world's crude steel production has almost doubled since 2000, largely due to the increase in production in China to support the major growth that has occurred over the last decade.Iron ore is the primary raw material from which metallic iron is extracted to make steel. The rapid increase in crude steel production in the last decade has seen major expansions in world iron ore production from around 1 billion tonnes (Bt) in 2001 to over 2.9 Bt in 2012. China is the largest iron ore-producing country, producing about 1.3 Bt in 2012, which accounts for about 45% of the world's iron ore production, followed by Australia and Brazil with a combined production of 919 million tonnes (Mt) in 2012.With respect to iron ore imports and exports, China imported about 65% of the world's seaborne iron ore trade in 2013, followed by Japan (11%), Europe (10%), and Korea (6%), which is a clear indication that the Asian countries are driving the international iron ore industry. In terms of tonnages, iron ore imports into China have risen from about 50 Mt/a in 2000 to around 745 Mt/a in 2012, with imports in 2013 being about 820 Mt/a. These imports were largely from Australia, Brazil, South Africa, Canada, and India, the three largest iron ore producers in the world being Vale in Brazil and Rio Tinto and BHP Billiton with operations primarily in Australia. Between them, these companies are responsible for about 61% of the world's seaborne trade in iron ore.While the iron ore mining industry is sometimes viewed as a simple quarrying operation, the industry is fiercely competitive internationally and is under considerable pressure at present to reduce costs due to the recent major fall in iron ore prices. Consequently, the level of technology adopted by the industry is high and often quite advanced. However, despite these developments, substantial challenges still face the international iron ore industry over the next 10–20 years as reserves of high-grade ore around the world continue to fall and alternative ore types need to be developed to replace them, including progressively lower-grade hematite/goethite ores, magnetite ores, and polymetallic ores such as those currently being exploited in China that are low in grade, complex in mineralogy, and fine in grain. These ores will increasingly require crushing and grinding to liberate the valuable minerals followed by concentration processes such as gravity separation, magnetic separation, flotation, leaching, and bioprocessing to produce high-grade products suitable for subsequent downstream processing. Consequently, there will be a continuous need to improve grinding and separation efficiencies to maximize productivity and reduce production costs, as well as reduce the production of waste products, water consumption, greenhouse and other gaseous emissions, and overall environmental impact.The recent unprecedented expansion of the iron ore industry triggered by China's growth and the need for steel for urbanization and infrastructure development appear to have peaked, and iron ore prices have fallen nearly 40% to less than US$80 per tonne in September 2014 from around US$130 per tonne (CFR China) in January 2014 and even more from their historic high of more than US$180 per tonne (CFR China) around 2011. This drop in iron ore price is attributed to a cooling of the Chinese economy and an oversupply of iron ore from the major iron ore producers. This has put considerable pressure on the higher-cost iron ore producers to reduce costs, and even the major producers such as BHP Billiton, Rio Tinto, Vale, Fortescue Metals Group (FMG), and Kumba Iron Ore at the lower end of the cost curve are under pressure to reduce costs. However, analysis of per capita steel consumption in China shows that consumption levels are still well below those of other developed countries in the world, so the major iron ore companies are still optimistic about the future outlook for the iron ore industry and are continuing to invest, albeit at a more moderate rate. Notwithstanding this, it is expected that there will be casualties among the high-cost producers, particularly those that have recently entered the iron ore market with high start-up costs and debt levels. The iron ore price is expected to gradually recover from the current lows when production levels better match market demand, but the highs of $US130 per tonne and above are unlikely to be repeated any time soon.