The scale of these challenges are massive, but they are far from insurmountable, and there are an array of options that Australia’s iron ore miners can pursue.

The trick is choosing a path that maximizes profits, or at least minimizes costs, while ensuring that the industry continues to prosper.

Australia is the world’s largest exporter of iron ore, the key raw material used to make steel, and it shipped out about 930 million metric tons last year, which at current prices would be worth about $93 billion.

Australia is also the world’s largest exporter of metallurgical coal, used to make steel, ranks second in thermal coal and in liquefied natural gas, while also being the biggest exporter of lithium and the largest net exporter of gold.

But the exports of all these commodities together barely exceed the value of iron ore shipments, underscoring the outsized role of the ore, which is mainly produced in the state of Western Australia.

Just over 80% of iron ore exports head to China, which buys about 70% of the total global seaborne volumes and produces about half of the world’s total steel.

Putting these numbers together gives a picture of a dominant producer and a dominant buyer in the iron ore market.

The rise of China since the late nineties allowed Australia’s iron ore miners to massively ramp up output, reap economies of scale and become hugely profitable.

But the nature of both China’s demand and the process of making steel are likely to change in the next few years, threatening the current model whereby Australia produces vast quantities of iron ore that is turned into steel in blast furnaces and basic oxygen furnaces, processes that require the use of coking coal.

China’s steel output has flatlined for the past five years around the 1 billion ton per annum level, and most analysts presenting at this week’s Global Iron Ore and Steel Outlook Conference in Perth predicted that production will gradually decline in the next few years.

This is partly because China’s infrastructure and housing construction will ease, but also because China will increasingly use scrap steel in electric arc furnaces to produce new steel products.

While Australia’s iron ore miners may be able to offset the loss of some of China’s demand by selling to newer steel producers in Southeast Asia, it’s likely that the overall market for iron ore will soon decline.

It’s also likely to change in composition, with higher grades of iron ore preferred as these can be more easily used as a feedstock along with scrap in electric arc furnaces.

Higher grades of iron ore can also more easily be upgraded into direct reduction iron (DRI), which in turn can be turned into steel without using coal as a fuel.

Making steel using DRI produced with green hydrogen and renewable energy is one of the ways the industry is thinking of reducing carbon emissions.

Even using natural gas to make DRI can reduce emissions by up to 75%.

The problem is that DRI is tricky to export given it can be volatile, so it tends to be made at the same location as the steel furnaces.

Value chains

So, if Australia’s iron ore miners are thinking of moving up the steel value chain, they would have to find ways of producing DRI and turning it into steel in Australia, using renewable energy.

Another path is upgrading the iron ore into hot briquetted iron (HBI), which is an upgraded form of DRI, whereby the DRI is converted into a compact form using heat.

HBI can be shipped, and can be used in either an electric arc furnace or a basic oxygen unit.

Should Australia’s iron ore miners move to upgrade their product, they will need significant investment, and there is no certainty that the upgraded products will deliver sufficiently higher margins.

For example, if an iron ore miner agreed with its customers in China, Japan and South Korea to supply HBI instead of iron ore fines, this would require significant investment in a clean energy system.

The iron ore miners have been successful in running complex operations at low costs, but setting up a wind/solar power plants, a green hydrogen electrolyser and possibly battery storage as well would be a totally different challenge.

There is also the possibility of exporting iron ore to a third country for processing into HBI, with Gulf countries such as Saudi Arabia a potential destination.

These countries have large quantities of natural gas which could be used to turn iron ore into HBI in a process that would still be more environmentally friendly than using coking coal.

The HBI could then be shipped from the Middle East to customers in Asia.

However, there are several other factors that would come into play, such as steel nationalism.

Many countries see steel as a key commodity and want to retain their own industries. It’s unlikely Japan would want to buy green steel from Australia, but it might be prepared to buy HBI and keep the final process of making steel inside its borders.

The problem for Australia’s iron ore sector is that it has a plethora of options in adjusting to decarbonization and peak steel in China.

But all involve risks and costs, and this is trouble for an industry that has spent the last decade de-risking itself and concentrating on improving shareholder returns.

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

(Editing by Miral Fahmy)

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.50% higher at 844 yuan ($116.79) a metric ton, for a week-on-week rise of 6.1%.

Average daily hot metal output inched up 0.3% from last week to 2.21 million tons as of March 22, a survey of Chinese steelmakers showed, reversing a four-week downtrend, while profitability climbed to 22.94% from 21.21%, according to data from consultancy Mysteel.

“More mills under equipment maintenance may resume production in April,” analysts at First Futures said in a note.

However, benchmark April iron ore on the Singapore Exchange fell 1.07% to $108.6 a ton as of 0722 GMT, partly pressured by a stronger US dollar, recording a week-on-week increase of 8.7% so far.

“The iron ore market should be relatively balanced and keep prices from falling much below current levels amid low supply growth and demand from other sectors offseting a fall in the residential real estate sector,” analysts at ANZ said in a note.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 2.37% and 0.6%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were largely rangebound. Rebar ticked up 0.7% and hot-rolled coil added 0.53%, while wire rod was little changed and stainless steel lost 0.18%.

“Despite some positive signs, the steel market is still facing certain downside risk as the current steel consumption is still weaker than the same period in the past years and steel stocks remained high,” analysts at Huatai Futures said in a note.

($1 = 7.2267 Chinese yuan)

(By Amy Lv and Zsastee Ia Villanueva; Editing by Varun H K and Shounak Dasgupta)

Column: Iron ore faces China fundamentals and sentiment hurdles

Jindal officials are carrying out inspections at iron-ore plants of CVG Ferrominera Orinoco, according to two people familiar with the process, who asked not to be named as the information isn’t public. The company, which is controlled by state-owned conglomerate Corporacion Venezolana de Guayana, has five plants that produce iron-ore pellets and briquettes that serve as raw material for steelmaking.

Jindal aims to export 600,000 metric tons of the raw material per month by the end of the year, investing an initial $800,000 to upgrade existing equipment, according to one of the people. Terms of the deal aren’t clear since neither the Venezuelan government nor New Delhi-based Jindal have confirmed the arrangement.

Venezuela’s information ministry and Jindal didn’t respond to repeated requests for comment.

Venezuela’s partnership with Jindal is a departure from the government’s longstanding reluctance to involve private firms into its tightly held, impoverished mining industry.

In the mid-2000s the late president Hugo Chavez reversed a privatization process started by previous governments for state-owned gold, steel and cement companies. The measure saw the exit of Luxembourg’s Ternium SA, Switzerland’s Holcim AG, Mexico’s Cemex SAB and Canada’s Crystallex International Corp. among others.

After 18 years, Maduro now seeks to reinstate foreign partnerships.

Ferrominera has an annual installed capacity of 25,000 tons of iron ore and proven reserves of 4.2 million tons. Its plants have been running below capacity after years of lack of investment and a power crisis that in 2009 forced the company to cut production to save energy.

The company’s output has fallen over the years, from 15.6 million metric tons in 2001 to 5.7 million tons in 2017, according to the latest figures by the Venezuela Iron and Steel Institute.

The country’s metallurgy sector has suffered setbacks due to expropriations and underinvestment to the point that it has “practically disappeared,” according to a 2023 report by the Venezuela mine engineering association. Since 2000, the number of private companies in the sector has fallen from 1,200 to 70.

(By Fabiola Zerpa)

The country produced over 99.8 million tonnes of coal in the period on the back of rising power demand.

India, the world’s second-largest coal user, generatedrecord-high coal-fired electricity in January as rising demand for air conditioning meant that power generation firms did not make big cuts to the use of coal and other fossil fuels.

Other minerals such as iron ore, a key raw material for steel, reported a nearly 41% year-on-year growth in sales value amid growing steel demand in the country. India produced 25.2 million tonnes of iron ore in the month.

The PIB release also showed that the production of minerals such as magnesite – used to make synthetic rubber – grew over 90%, and copper concentrate – used to make refined copper – grew over 34%.

India’s refined copper production is estimated at around 555,000 million tonnes per year in the coming fiscal year while domestic consumption is expected to come in at more than 750,000 metric tons.

(By Manvi Pant; Editing by Janane Venkatraman)

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 5.35% higher at 827 yuan ($114.87) a metric ton, the highest since March 13.

The benchmark April iron ore on the Singapore Exchange rose 2.91% to $106.9 a ton, as of 0743 GMT, also the highest since March 13.

“The rise in fixed asset investment should help support steel demand,” analysts at ANZ said in a note.

Fixed asset investment expanded 4.2% in the January-February period from the same period a year earlier, official data showed on Monday, versus expectations for a 3.2% rise.

Also, signs of stabilizing futures prices the day before encouraged some mills to re-enter the market to procure portside cargoes, with the increasing liquidity in the spot market, in turn, boosting sentiment, analysts said.

Transaction volumes of iron ore at major Chinese ports climbed by 66% from the previous session to 1.06 million tons, data from consultancy Mysteel showed.

“We expect hot metal output to touch the bottom this week,” analysts at Galaxy Futures said in a note.

“Steel demand from the infrastructure sector will likely see an obvious increase in either late March or early April, so we do not think we should be so bearish about the construction steel market,” they added.

Other steelmaking ingredients on the DCE also registered gains, with coking coal and coke up 3.59% and 2.49%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were higher. Rebar gained 2.85%, hot-rolled coil climbed 2.99%, wire rod rose 2.14% while stainless steel was little changed.

($1 = 7.1993 Chinese yuan)

(By Zsastee Ia Villanueva and Amy Lv; Editing by Mrigank Dhaniwala and Sohini Goswami)

The Dutch suit is being pursued by law firms Pogust Goodhead and Lemstra Van der Korst against Vale and Samarco Iron Ore Europe, a marketing unit of the Samarco JV, which was responsible for operating the dam. 

Pogust Goodhead, which is also involved in the UK case against BHP, told the Financial Times on Tuesday the firm was acting on behalf of 77,000 individuals, nearly 1,000 businesses, and seven municipalities.

BHP is already dealing with a major class action lawsuit from around 700,000 claimants in the UK related to the same incident. The rupture of the Fundão mining waste facility on November 2015 resulted in 19 fatalities and pollution of waterways that reached the Atlantic Ocean, more than 650 km (400 miles) away. 

According to Vale, the Renova foundation, which the companies have been using to pay for some of the damages caused by the fatal dam collapse, had recieved 34.7 billion reais ($6.9 billion) in socioeconomic and environmental compensation as of December 2023.

A Brazilian court ruled in January that Samarco, Vale, and BHP had to pay $47.6 billion reals ($9.44bn) in compensation for the dam collapse. Both Vale and BHP have stated that they may appeal this decision.

That ruling did not apply to individual victims, Pogust Goodhead said in January.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) recouped lost ground and ended daytime trade 0.9% higher at 803 yuan ($111.56) a metric ton, following an 11% week-on-week drop on Friday.

The benchmark April iron ore on the Singapore Exchange was up 3.7% at $103.65 a ton, as of 0835 GMT.

Investment in the property sector, the largest steel consumer in China, slid 9% year-on-year in January-February, compared with a 24% fall in December, official data showed, although it’s still far from levels of reaching stability.

This boosted sentiment to some extent especially after data showed that new bank lending in China fell more than expected in February from a record high the previous month and China’s policy bank left a key policy rate unchanged while withdrawing cash from a medium-term policy loan operation on Friday.

Lifting sentiment, total shipments from Australia and Brazil – two major iron ore suppliers – dropped 12.5% week-on-week to 22.08 million tons in the week ended March 18, data from consultancy Mysteel showed.

Tepid near-term ore demand posed as headwinds to market sentiment and prices, said analysts.

Average daily hot metal output among Chinese steelmakers surveyed fell for a fourth straight week in the week ended March 15, down by 0.6% on-week to 2.21 million tons, according to Mysteel data.

Other steelmaking ingredients on the DCE were mixed, with coking coal up 1.1% while coke was flat.

Steel benchmarks on the Shanghai Futures Exchange were mostly higher on rising raw materials prices.

Rebar ticked 0.3% higher, hot-rolled coil gained 0.7%, stainless steel climbed 1.4%, while wire rod declined 0.3%.

China’s crude steel output climbed 1.6% in the first two months of 2024 from a year earlier, confounding market expectations that production would decline in the low-demand period when many steelmakers carried out maintenance work.

($1 = 7.1981 Chinese yuan)

(By Amy Lv and Andrew Hayley; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

The price of Singapore Exchange iron ore contracts dropped to $110.05 a metric ton on Wednesday, the lowest close since Aug. 31 and down 23.4% from the peak so far in 2024 of $143.60, reached on Jan. 3.

The main domestic benchmark in China, the Dalian Commodity Exchange futures contract fell to 819.5 yuan ($114.04) a ton on Wednesday, a five-month low and down 19.2% from the peak so far this year of 1,014 yuan on Jan. 4.

On the fundamental side of the equation, there are signs that China’s strong appetite for imported iron ore the first two months of the year has moderated in March, and port inventories have swelled.

China, which buys more than 70% of global seaborne iron ore, is on track to import 99.62 million tons of the key steel raw material in March, according to data compiled by commodity analysts Kpler.

Imports may be lower than the Kpler estimate, with LSEG data pointing to arrivals of 91.4 million tons in March, which would be the weakest month since April last year.

Official customs data showed imports in the first two months of 2024 coming in at 209.45 million tons, up 8.1% from the same period in 2023, and giving a daily average of 3.49 million tons.

Even assuming the more optimistic Kpler data for March gives an expected daily import figure of 3.21 million tons, which would be 8% below the rate for the first two months.

One factor that is worth noting is that imports are likely dropping in March because of the high prices that prevailed for much of the first two months of the year, when cargoes arriving this month would have been arranged.

Iron ore in Singapore was still above $130 a ton on Feb. 16, and it is only since then that prices have moderated to the current level.

Stockpiles build

Another reason for the decline in imports is that China’s port inventories have been rising strongly in recent weeks, and are back to what are comfortable levels for this time of year by historic standards.

Stockpiles monitored by consultants SteelHome rose to 138.2 million tons in the week to March 8, up from 134.9 million the prior week.

They are now 31.7% higher than the 7-1/2-year low of 104.9 million tons hit in late October.

The current level of inventories is almost exactly the same as the 138.6 million tons recorded for the same week in March last year.

In addition to softer fundamentals, the iron ore market is being hurt by the worsening sentiment surrounding key parts of China’s economy, including the key residential property sector.

There are fears Beijing isn’t doing enough to stimulate the sector, which has been beset by problems including liquidity issues at major developers and waning interest among buyers.

While senior officials have said they will support the housing sector, it remains to be seen whether any new steps will prove effective.

Outside of construction there are also problems with manufacturing, with the official Purchasing Managers’ Index shrinking for a fifth month in February, coming in at 49.1 points, down from 49.2 in January, and staying below the 50-level that separates growth from contraction.

Overall, the outlook for China’s iron ore demand has darkened after the strong start to 2024, and it will likely take a sustained period of lower prices and improved sentiment to lift the clouds.

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

(Editing by Lincoln Feast)

Copper has surged 5% this week, ending a months-long spell of inertia, as investors hone in on risks to supply at mines and smelters. Tentatively, traders are also warming to the idea that the worst of a global downturn is in the past, particularly for metals like copper that are increasingly used in electric vehicles and renewables.

But signs of the headwinds in traditional industrial sectors are still plain to see in the iron ore market, where futures fell below $100 a ton for the first time in seven months on Friday. Investors are betting that China’s years-long property crisis will run through 2024, keeping a lid on demand.

The steelmaking ingredient has shed more than 30% since early January as hopes of a meaningful revival in construction activity faded. Loss-making steel mills are buying less ore, and stockpiles are piling up at Chinese ports.

[Click here for an interactive chart of copper prices]

Sentiment has soured since the recent National People’s Congress in Beijing, where policymakers set an ambitious 5% goal for economic growth, but offered few new measures that would boost infrastructure or other construction-intensive sectors. The latest drop will embolden those who believe that the effects of President Xi Jinping’s property crackdown still have significant room to run, and that last year’s rally in iron ore may have been a false dawn.

On Friday there were fresh signs that weakness in China’s industrial economy is hitting the copper market too, with stockpiles tracked by the Shanghai Futures Exchange surging to the highest level since the early days of the pandemic. The hope is that headwinds in traditional industrial areas will be offset by an ongoing surge in usage in electric vehicles and renewables.

Further afield, industrial conditions in Europe and the US still look soft, but there’s growing optimism about copper usage in India, where rising investment has helped fuel blowout growth rates of more than 8% — making it the fastest-growing major economy.

For now, the main catalyst fueling copper’s rally is an unexpected tightening in global mine supplies. That’s been driven mainly by last year’s closure of a giant mine in Panama, but there are also growing worries about output in Zambia, which is facing an El Niño-induced power crisis.

Prices spiked on huge volumes on Wednesday after smelters in China held a crisis meeting on how to cope with a sharp drop in processing fees following disruptions to supplies of mined ore. The group stopped short of coordinated production cuts, but pledged to re-arrange maintenance work, reduce runs and delay the startup of new projects.

In the coming weeks investors will be watching Shanghai exchange inventories closely to gauge both the strength of demand and the extent of any capacity curtailments.

“The increase in SHFE stockpiles has been bigger than we’d anticipated, but we expect to see them coming down over the next few weeks,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, said by phone. “If the pace of the inventory builds doesn’t start to slow, investors will start to question whether smelters are actually cutting and whether the impact of weak construction activity is starting to weigh more heavily on the market.”

Copper jumped as much as 2% to $9,066.50 a ton on the London Metal Exchange on Friday, and was trading at $9,030 a ton as of 2:13 p.m. local time. Other metals were mixed, with aluminum gaining 0.6% and lead dropping 1.8%.

Iron ore futures in Singapore held below the key $100 level, trading at $98 a ton.

(By Mark Burton)

That potential bid, though, is dependent on the current Nippon-US Steel tie-up falling apart, Goncalves said in a phone interview. If he were to make an offer, the Cliffs CEO said he’d have the backing of the influential steelworkers union that’s also blasted Nippon’s takeover approach.

The Cliffs CEO, known in the industry for his colorful and combative approach, touted his closeness and support from the influential steel union — and then proved his point by dialing USW President David McCall into the call with Bloomberg News. In the call, McCall reiterated the union’s support for a potential Cliffs bid.

Goncalves also said he’s talking regularly to the White House.

The White House declined to comment.

A recent share plunge for US Steel shows that investors are increasingly concerned about the future of the Nippon deal. President Joe Biden on Thursday said the iconic Pennsylvania company should retain American ownership. Biden’s move against a takeover by a the Japanese company came despite the risk of upsetting a key ally.

US Steel plunged as much as 11% on Thursday to $36.38. The stock is down about 20% in two days, on pace for the biggest such loss since 2020.

Nippon’s proposal is to buy the company for $55 per share in cash.

If given the opportunity, Goncalves would consider a bid “in the $30s,” he said in the interview Thursday.

Nippon didn’t immediately respond to a request for comment. On Wednesday, Nippon Steel and US Steel in a joint statement said the companies will continue to advocate for the deal, and “we are confident that fair and thoughtful evaluation will result in its approval.”

Biden’s Intervention

Biden’s statement marks a rare presidential intervention in a transaction that outside an election year would have drawn less public scrutiny. Despite its storied history, US Steel’s role in the economy has diminished over several decades, a period during which producers in Asia have risen to dominate the global steel market. And while Nippon Steel’s proposed $14.1 billion acquisition targets a historic business name, a takeover in the US commodities industry by a company based in a friendly country is hardly unusual.

Still, the announcement of a Japanese company’s acquisition triggered opposition from Republican and Democratic lawmakers as well as the influential United Steelworkers union. Biden’s allies have urged the administration to kill the deal over national security concerns and the threat to unionized steel jobs.

Goncalves said he thinks it’s a “foregone conclusion” the Nippon deal will fall apart.

“There is no more lobbying, there’s no more negotiation. It’s over. It’s over,” Goncalves said, referring to Nippon Steel’s deal to buy US Steel. “And the only other buyer that the union would accept is Cleveland-Cliffs.”

Union support

After dialing McCall into the phone interview, Goncalves said to the union leader: “I would like you to, if you can, express to him — to confirm or negate — if you disagree with me, that Cliffs is the only company the union would endorse to acquire.”

“Yes, because you still have our right to bid,” McCall responded to Goncalves. He was referring to a legal right the union had to launch a counteroffer for US Steel, which it transferred to Cliffs last year.

The Nippon bid remains on the table and it’s not clear what implications Biden’s remarks might actually have for an ongoing federal review.

Still, the reiteration of support from the union for Cliffs will be a blow to the Japanese company, which has been seeking to win over McCall and his labor group in order to reduce the political pressure against the deal.

(By Joe Deaux)

(By Saliou Samb and Alessandra Prentice; Editing by Chris Reese)

The steelmaking material rose on Tuesday after plunging almost 7% in the previous session to below $110 a ton, the first time it’s been under that level since August. Iron ore has lost about a quarter of its value since early January.

Persistent issues facing China’s steel-intensive real estate sector have weighed on demand. The crisis looks far from over, with state-backed developer China Vanke Co. stripped of its investment-grade credit rating by Moody’s Ratings. The agency said credit metrics and liquidity will weaken because of falling home sales and funding uncertainties.

The annual National People’s Congress in Beijing, which concluded Monday, offered few positive signs for investors, and a hoped for pickup in construction activity following the Lunar New Year holidays hasn’t eventuated. Iron ore stockpiles at Chinese ports have swelled to the highest in a year.

Iron ore rose 1.3% to $108.65 a ton as of 2:43 p.m. in Singapore. Futures in Dalian were little changed, while steel contracts in Shanghai climbed.

Base metals were lower on the London Metal Exchange ahead of the release of US inflation data that could impact the timing of the Federal Reserve’s pivot to monetary easing. Aluminum was down 0.3% and copper slipped 0.1%.

(By Jason Scott)

Read More: Aluminum price nears six-week high on signs of seasonally robust demand

Last week, Vale, one of the world’s largest iron ore miners, extended the term of its CEO Eduardo Bartolomeo until the end of the year, amid media reports that the Brazilian government was seeking to influence the decision.

In the letter to Vale’s chair, former board member Jose Luciano Duarte Penido said the process of choosing a new CEO had “evident and nefarious political influence,” and that there had been frequent and biased leaks to the press made “in clear disregard for confidentiality.”

Vale had reported Duarte Penido’s resignation on Monday without detailing his reasons.

In a securities filing released by Vale on Tuesday, the board said its actions during the process of defining the next CEO complied with the firm’s bylaws, internal regulations and corporate policies.

(By Marta Nogueira and Peter Frontini; Editing by Steven Grattan and Nia Williams)

In a paper published in the journal Chemical Science, Johannes Fessler explains that each of these three chemical elements has the potential to replace several noble metals that are commonly employed in organic chemistry to catalyze fine chemicals.

As an example, Fessler describes a complex active ingredient candidate based on pyrrole, a common drug precursor, which can be created from “simple starting materials” with the help of an acid-tolerant homogeneous iron catalyst and at room temperature.

“Homogeneous” catalysis means that the starting materials – catalyst, solvent and ultimately the product and by-product – are dissolved in a single reaction vessel. They must therefore be separated after each reaction step, purified and prepared for the next step.

“If you manage to save one of these steps in the chemical process, you greatly reduce the amount of time and material required and minimize waste,” Fessler said in a media statement.

This is precisely what he achieved with the reaction to pyrrole, using a reaction cascade.

Climate-neutral chemical industry

Replacing noble metals as catalysts with iron and the like has become an attractive research topic.

“The task of climate-neutral, sustainable management is facing the chemical industry as well as all other sectors,” the researcher said.

Iron is abundant, making up 5% of the earth’s crust. And after iron and titanium, manganese is the most common transition metal on the planet.

On the other hand, there is a reason why base metals have so far only played a marginal role in organic chemistry.

“They are often less stable in catalytic processes than catalysts made of noble metals,” Fessler explained. “In addition, they usually work at high temperatures and pressures in the area I am researching.”

However, such harsh conditions would destroy the complex molecules in drug production. The chemical structures that ensure the specific effect of a drug, the so-called functional groups in the molecule, are particularly at risk.

In this respect, it is a success to show how catalysts made of iron, manganese and cobalt can sometimes manage with significantly milder reaction conditions compared to previous practice. In the case of pyrrole, these are temperatures between 20 and 30 degrees Celsius.

Johannes Fessler’s experiments revealed another advantage of his approach: His non-noble metal catalysts very precisely converted only those molecules that the chemists needed in the actual synthesis. “We call this approach highly selective. It produces hardly any by-products or waste,” he said.

The scientist tested the reliable functioning of his reaction on various active ingredients and drug precursors.

“We wanted to make sure that the iron catalyst also activates the right place in the molecule for these substances and spares the sensitive functional groups,” he noted.

In this way, the chemist tested his method on widely used cholesterol-lowering drugs and blood pressure medications, among others.

The National People’s Congress, an annual gathering of China’s parliament in Beijing which concludes Monday, failed to deliver gains in the prices of key commodities like iron ore and copper — evidence of a mismatch between Beijing’s ambitious goal for growth and the market’s lack of conviction in the plan to get there.

Expanding the economy by 5% this year is likely to require fiscal stimulus beyond the measures unveiled by policymakers. On the upside, that could yet spur better returns on commodities if the government is forced to buttress growth with more spending on energy and metals-intensive infrastructure.

“The ultimate question will be the willingness of policymakers to defend China’s economic growth target of ‘around 5%’ this year,” Vivek Dhar, analyst at Commonwealth Bank of Australia, said in a note. “We think the goal will be challenging, but if growth undershoots even downside expectations of policymakers, it will likely open the door to more infrastructure-related stimulus.”

The policy focus on getting firms to upgrade industrial equipment and households to swap out old cars and appliances more regularly should help metals consumption, especially if it can give cooling electric vehicle demand a boost and accelerate the expansion of EVs as a proportion of the total fleet.

But the biggest risk remains the crisis-wracked housing market, which means additional private or state spending may only offset the collapse in demand from property.

Beijing’s longer-term bet is that real estate can be replaced by new drivers of demand: EVs, clean energy and high-tech manufacturing — a change that over time is likely to radically alter its approach to raw materials markets and focus policymaking more squarely on greener ingredients.

“There is likely to be little support for demand of commodities such as oil, steel and iron ore,” ANZ Group Holdings Ltd. said in a note. “Instead, metals and critical minerals and cleaner burning fuels such as gas will be highly sought after.”

But in the short term, fretting over growth entrenches the importance of cheap and reliable power. That means sticking with what you know, and for China that’s fossil fuels, and coal in particular.

Beijing’s target to reduce energy intensity this year was set at a relatively modest 2.5%. And for all of China’s world-leading buildout of renewable energy, the government continues to promote coal’s role in the economy. While the country is rapidly approaching peak consumption of the fuel, the period over which it plateaus is likely to be drawn out, according to an official at the national coal association.

Read More: Iron ore price tumbles on persistently weak fundamentals in China

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 5.41% lower at 831 yuan ($115.68) a metric ton, the lowest since Oct. 23, 2023.

The benchmark April iron ore on the Singapore Exchange slid 6.71% to $107.45 a ton, as of 0808 GMT, the lowest since Aug. 22.

A temporary supply glut as a result of better-than-expected shipments so far in the first quarter of the year and weaker-than-expected demand recovery has put intense downward pressure on prices, analysts said.

“The global ore shipments have climbed to a relatively high level. The recent ore price fall has not triggered a production reduction among non-mainstream suppliers,” analysts at Citic Futures said in a note.

“Some mills postponed again the timing of production resumption, curbing ore demand rise and destocking at ports,” they added.

Poor profitability among steelmakers dented their interest in ramping up output, and the weakness in the steel market permeated into the upstream raw materials market, weighing on ore prices, analysts at Everbright Futures said in a note.

Other steelmaking ingredients on the DCE lost ground, with coking coal and coke down 2.65% and 2.04%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were similarly weaker. Rebar slipped 2.41%, hot-rolled coil shed 1.95%, wire rod fell 1.62% and stainless steel surrendered 1.34%.

The weakness in the ferrous market came despite Chinese regulators asking large banks to step up support for Vanke, a state-backed property developer.

Property market in China, the largest steel consumer, has been hit hard by a debt crisis and not yet shown obvious signs of improvement despite various measures introduced by Beijing to revive the sector.

($1 = 7.1838 Chinese yuan)

(By Amy Lv, Andrew Hayley and Zsastee Ia Villanueva; Editing by Mrigank Dhaniwala and Sohini Goswami)

Bartolomeo will also support the CEO transition process starting in 2025 and will remain as a company adviser until December of that year, the company confirmed in a statement late Friday. Bloomberg News reported the decision earlier.

The outcome follows weeks of drama over the selection of Vale’s next leader amid mounting pressure from the Brazilian government to intervene in the succession process. The wrangling has put a spotlight on the government’s influence in the mining sector, even though the metals producer was privatized in 1997.

The board decision was not unanimous, with two directors in opposition, two people familiar with the matter said.

Bartolomeo, who took the top job five years ago, publicly declared his wish in early December to remain CEO after his current term ends in May.

The 59-year-old CEO spent his tenure focused on recovering Vale’s reputation among investors concerned about environment, social and governance issues. He sought to reduce risks tied to storage of mining waste following two tailings dam disasters in 2015 and 2019. Bartolomeo also shed non-core businesses and turned the base metals operations into a separate business to unlock value from Vale’s nickel and copper assets.

The market has recognized Bartolomeo’s legacy on safety, including a plan to eliminate dozens of high-risk tailings dams and a $7.6 billion settlement over the Brumadinho dam collapse in southeastern Brazil. On the flip side, investors have been concerned about operational performance and costs control, along with the perception that Vale could better navigate relations with states and the federal government.

Vale could play a strategic role in efforts by President Luiz Inacio Lula da Silva to reboot Brazil’s economy. For the metal producer, government support could help cut through bureaucracy on issue such as environmental permits and railroad concessions that have hobbled the company’s ambitions.

Vale’s succession policy says that an international consultancy firm with expertise in selecting global executives should be hired. The next CEO of the Rio de Janeiro-based company would be tapped from three shortlisted candidates selected by the consultancy.

(By Mariana Durao)

According to the Federal Regional Court of the Sixth Region in the Brazilian state, prosecutors did not meet the minimum standards to prove the former Vale president’s involvement in the dam breach at one of the company’s iron ore mines.

The disaster in January 2019 resulted in the deaths of 270 people.

The court consists of three members. On Dec. 13, federal judge Boson Gambogi was the first to vote to dismiss the charges. This Tuesday, federal judge Pedro Felipe Santos followed his colleague’s decision, as reported by Folha de São Paulo.

However, votes can be changed until Mar. 12.

Fifteen other individuals, including executives from Vale and the consulting firm Tuv Sud, are defendants in the case. All are accused of qualified homicide and environmental crimes.

According to a report presented by the Federal Police in February 2021, the breach occurred after liquefaction of the tailings during drilling on the dam.

Schvartsman’s lawyer, Maurício de Oliveira Campos Júnior, said that the executive was unaware of that drilling.

Georgy Filomonov, the acting governor of the region, said a drone had hit the plant early in the morning and that state investigators were working on the scene.

“In the Vologda region at the Severstal enterprise this morning there was an incident in the area of the blast furnace which was struck by a drone of unidentified affiliation. The main thing is there are no casualties,” he said in a statement.

“In addition, the operation of the furnace was not disrupted and the enterprise is functioning in normal mode.”

Severstal earlier on Thursday had spoken of an unspecified “technological incident.”

(Editing by Andrew Osborn)

CSN reported late on Wednesday an 851 million reais ($172.11 million) net profit for the quarter ended in December, a 332% year-on-year increase although still below the 981.9 million expected by analysts polled by LSEG.

The company said its mining segment was again the main lever of its results, with “solid margin expansion”. Revenue for the business grew 42.5% from a year earlier to 5.03 billion reais.

Steelmaking revenue, on the other hand, fell 6.6% to 5.65 billion reais.

Shares of CSN fell 4% in afternoon trade, after rising as much as 3.5% earlier in the session, while its listed mining subsidiary CSN Mineracao was up 2%. Brazil’s Bovespa stock index traded 0.5% lower.

Analysts at Itau BBA highlighted the mining results, “as better price realization more than offset lower volumes.”

CSN’s CFO Marcelo Cunha Ribeiro told analysts on Thursday the firm is seeking for partners in its mining and energy businesses.

Brazilian steelmakers have complained about cheaper steel, particularly from Russia and China, “flooding” the South American country’s market, and have asked the government for a temporary tax on imports.

Despite a “sharper quarterly drop” in China’s steel production during the fourth quarter, CSN expects that Chinese steelmakers will maintain their strong level of activity this year, “with the Chinese government’s incentives boosting various strategic sectors.”

CSN, which also has a cement unit, said its quarterly revenue rose 7.9% to 12 billion reais.

Its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 16% to 3.62 billion reais, raising its adjusted EBITDA margin to 29.08% from 27.06% a year earlier.

Cunha also said CSN’s bid to buy assets from InterCement would not change its target to reduce financial leverage to 2 times by the end of the year – it was at 2.58 times in the fourth quarter.

($1 = 4.9446 reais)

(By Andre Romani, Peter Frontini and Alberto Alerigi Jr.; Editing by David Evans)

While experts continue to debate the potential implications of adopting AI at both a personal and business level, the mining industry has not stayed still waiting for the conclusions.

The sector has already embarked on a quest to transform operations from the traditional heavy-equipment and men-on-site operations, to mines that integrate connectivity, automation and AI.

On a visit to MWC Barcelona, an annual trade show dedicated to the mobile communications industry, MINING.COM was able to see how the world of telecommunications and mining are increasingly intertwined. 

Invited by telecommunications giant Huawei, MINING.com — the first mining media to ever attend MWC — saw sensors, smart cameras and 5G relay boxes ready to be deployed to mines around the world.

There was buzz around the new generation of mobile internet — “5.5G,” or “5G Advanced”. The new standard is expected to make the networks themselves more “intelligent” through the application of AI and machine learning, while also boosting performance and reducing overall power consumption.

When Huawei vice president of global marketing and solutions for mining and oil and gas, Jack Chan, was asked why the company began developing solutions for the industry, the answer was as quick as clear: safety.

“In China we have almost 3 million coal miners working in 4,400 coal mines, which are underground and often register deadly accidents,” Chan said. “When taking workers out of the tunnels and into a room full of screens displaying numbers, graphs and images, not only a company is saving lives, but is also more appealing to the new generations.”

Chan added that Information and Communications Technology (ICT) infrastructure is crucial to support intelligent mining. Without fast and reliable communication networks, robust computing power, rapid data storage, and vigilant network security, essential tasks, including real-time monitoring and instant data exchange would be impossible, he explained.

“Young people don’t want to spend hours underground, hot and breathing recycled air, but they are happy to sit in a room with air conditioner and monitor activities in real time,” he said.

Data on extraction, personnel location and danger detection is centralized on a system designed to eliminate problems caused by human error and miscommunication. Instead of people, robots patrol and inspect the dark and narrow underground corridors.

“AI service architects and AI algorithm engineers will become key roles in the era of intelligence,” Chan predicts.

Remote and digital solutions are common in other coal operations, such as those in Canada and Australia, but China has lagged and now the government has set the goal of achieving basic digitalization of all mines by 2035.

Huawei is a step ahead with is AI-based Pangu Mining, a suit of applications launched in July last year, which were developed based on the pilot verification of large AI models at industrial levels. 

The name Pangu comes from ancient Chinese mythology and folklore. The legendary figure is associated with the creation of the world.

There are altogether 21 application scenarios related to nine operating activities, namely, coal mining, tunneling, primary transportation, auxiliary transportation, lifting, safety monitoring, rock burst prevention, coal preparation, and coking.

Rock bursts are a particularly challenging issue in mining. The primary means of preventing rock bursts is drilling destress holes, whose quality matters. Shandong Energy has managed to address this challenge in its Lilou and Xinjulong coal mines by deploying Huawei’s AI model. 

Thanks to its visual recognition capabilities, Pangu can intelligently analyze the quality of stress relief drilling, and assist rock burst prevention personnel in quality verification, reducing their review workload by 82%. It used to take three days to complete such checks; now the time has been shortened to 10 minutes, with a 100% acceptance rate.

Chile’s Codelco, the world’s largest copper miner, has also adopted Huawei solutions with the goal of turning around under-performing mines and projects that have crimped both production and profit.

The state-owned company is looking to streamline structures and prioritize productive areas at a time when copper output is at the lowest level in a quarter of a century.

It’s all about connectivity

Being a telecommunications company at heart, Huawei has been able to deploy connectivity solutions, from networks to an operative system able to run a wide range of equipment and smart machines. Named Harmony, the OS enables different devices to speak the same language, facilitating better connection and collaboration, and bringing a simple, continuous, secure and reliable interaction experience in all scenarios.

“In the era of intelligence, digital intelligence transformation can be accelerated only by combining AI technology with industry cognition and valuable data accumulated by enterprises,” Jason Liu, President, Learning & Certification Services of Huawei told the audience during MWC Barcelona 2024.

Liu said AI solutions should be used as a tool, not as a replacement of human intelligence.

Pangu, for instance, can detect a problem, inform the location and characteristic of such problem and provide solutions suggestions. The application is predictive, in the sense it can fill in the blanks at a very deep level.

AI is enabling mining companies to become insight‐driven enterprises that utilize data to make faster, accurate decisions, improve health and safety, boost efficiency through error elimination and reduce operations footprint.

Digital thinking is not just a tool for mining companies, but a core value that shapes their business. One of Huawei’s key messages is that to succeed in the industry, miners need to foster an organizational culture that embraces innovation and adapts to changing technologies.

The world’s fourth-largest iron ore miner is tipped for the greatest earnings slowdown over the next year compared with peers BHP Group Ltd., Rio Tinto Group and Vale SA, according to data compiled by Bloomberg. Shares of the Australian firm founded by billionaire Andrew Forrest have surged almost 30% in the past six months, outpacing peers. But since the start of this year, shares have tumbled alongside iron ore, one of 2024’s worst-performing major commodities.

As a relatively high-cost producer, the miner is more sensitive to iron ore price swings compared to peers, according to Mohsen Crofts, a Bloomberg Intelligence analyst based in Sydney.

“Fortescue’s operating margins are slimmer than BHP or Rio Tinto’s. Any change in the iron ore price will therefore have a greater Ebitda impact for Fortescue,” he said. “While BHP and Rio now get a material share of their revenue from base metals, Fortescue is for now still fully reliant on iron ore.”

The metal makes up about 91% of Fortescue’s revenue, compared to about half for BHP and Rio Tinto, according to Bloomberg-compiled data. Fortescue’s iron ore business propped up its half-year earnings released in February, bucking a trend of declining profits among its diversified rivals. But now Fortescue’s earnings growth is in doubt, with analyst estimates suggesting 14% downside for next year, the worst among its peers.

The Perth-based miner’s bumper stock run has also been halted by dwindling metal prices. China’s property woes have weighed on the steelmaking ingredient, which lost 10% last month. Post-Lunar New Year demand for iron ore remains disappointing amid a slow recovery to construction activities, wintry conditions and sluggish home buying.

“While Fortescue has benefited from significant unit cost reductions, cost inflation is kicking in now,” Jefferies analysts led by Mitch Ryan wrote in a note dated Feb. 28, downgrading the miner to underperform from hold after earnings. “While we believe management has done an excellent job operationally, Fortescue’s share price will be highly dependent on the iron ore price.”

The stock has no buy ratings and an average 12-month price target that’s 16% below Friday’s close, according to data compiled by Bloomberg. Meanwhile, price targets for rivals BHP, Rio Tinto and Vale all point to potential upside.

Still, the stock slump isn’t unique to Fortescue. Miners are the biggest laggards on the Australian benchmark this year as commodity prices from iron ore to lithium and nickel crater. Fortescue has fallen 10% so far this year, with BHP and Rio posting similar drops.

Despite lackluster demand in recent weeks from China, the world’s largest steel manufacturer, analysts expect iron ore futures to regain lost ground in the short and midterm. UBS Group AG, which has a sell rating on Fortescue, estimates the metal’s price will trade around $120 a ton for the remainder of 2024 before a plateau. Demand will be propped up by a growing appetite in India and Southeast Asia thereafter.

“We’ve always said that we would see China steel demand peaking, and it’s exactly what we’ve said,” Rio Tinto chief financial officer Peter Cunningham said in an analyst call last month. “Then you just see demand from elsewhere in Asean and in India growing as well. So, I think all of this is playing out exactly pretty much as we thought it would play out over time.”

(By Georgina McKay and Paul-Alain Hunt)

As head of the United Steelworkers, McCall finds himself in an unlikely place of power. Labor groups traditionally haven’t had much sway in US corporate takeovers. But 2024 is, of course, no ordinary year. So thanks to a growing political maelstrom that’s thrust the steelworker into the center of campaign rhetoric, McCall is now one of the most-crucial voices that can help decide the fate of Nippon Steel Corp.’s proposed $14 billion takeover of the storied United States Steel Corp.

And McCall is preparing for a fight.

“The transaction itself right now, as announced, there’s no way I’d accept it,” he said in a recent interview, indicating that he’s ready to go the brink – even if it means killing the deal – to make sure he can secure the concessions he’s seeking for his union members.

The union doesn’t have any official right to simply block an offer US Steel has accepted. What it does have is political leverage.

The influence of the United Steelworkers (USW) has grown stronger now than in any time in recent memory. Joe Biden has billed himself the most pro-union president in history, but Donald Trump has sought to undercut his labor support, appealing to rank-and-file auto workers and union members who have resented this administration’s clean energy agenda along with other policies. Union voters are seen as one of the key deciding blocs in the November presidential election.

The Nippon bid for US Steel is up for review by the Committee on Foreign Investment in the United States, or CFIUS, a process shrouded in secrecy. Allies of Biden have urged the administration to kill the deal over national security concerns — despite Japan being a close ally — and the threat to unionized steel jobs.

In the end, the final decision could come down to a signal to the White House about whether or not the union likes the deal. The USW has received “personal assurances” that Biden has “our backs,” according to a February statement.

That unique position underscores why interviews with more than two dozen investors, legal experts, steel consumers, brokers, service centers, analysts and executives paint the picture of an industry that is hanging on the words of one man: McCall.

Ultimately, the union holds the “political leverage,” Phil Gibbs, a nearly 20-year veteran covering the steel industry at Keybanc Capital Markets, said in an interview. “They clearly can make noise and if they saber rattle, they get in Biden’s ear or Donald Trump’s ear, or they stage a walk out — who knows what they’ll do.”

McCall’s moment comes as labor groups in the US are getting re-energized. Last fall, the United Auto Workers led a six-week strike that resulted in massive wage increases. That capped off a summer of strikes that saw Hollywood writers and actors walk off their jobs, and meanwhile workers at companies as varied as Starbucks Corp. and Apple Inc. have moved to unionize in recent years.

Even then, it’s hard to overstate just how rare it is for a union to hold this much power during a deal review.

“I can’t recall a situation where unions in particular have been sort of the voice looking to encourage CFIUS to block a deal,” said Rick Sofield, a partner at Debevoise & Plimpton who spent nearly 25 years as a federal government lawyer including helping to oversee national security reviews by CFIUS.

Upcoming meetings

A lot could come down to the next immediate period.

McCall and his top aides at the USW are expected to meet with representatives from Nippon Steel including Executive Vice President Takahiro Mori in the coming days, according to people familiar with the matter who asked not to be named because the information is private.

McCall says that for any discussions with Nippon the most-important points for the union will be: discussing the labor agreement, pension plans, retiree healthcare, capital expenditures and profit sharing.

For its part, Nippon has been telling investors it’s willing to make major concessions that are of importance to the union, according to people familiar with the matter who asked not to be named because the information is private. The concessions cited include making investments at US Steel plants, the people said.

Nippon said it “is focused on developing a productive working relationship with the USW and its members,” according to an emailed statement. The company “has assured the USW that it has the financial wherewithal to continue honoring all agreements currently in place between the USW and US Steel. We are confident that this transaction is in the best interest of the USW and its members.”

Just in the past week, McCall and Nippon confirmed that the two sides had signed a non-disclosure agreement, allowing talks to progress even as the union publicly maintains its opposition to the deal. Investors took that as a vote of confidence. US Steel shares quickly erased losses on the news and climbed as much as 1.4%.

The optimism may be overdone.

For those who are saying that the NDA is a sign of progress in the dealings between Nippon and the union, McCall has strong words: “I would say to you, emphatically, it is a lie.”

“We’ve gone back and forth and back and forth on an NDA, and that’s all we talked about,” McCall said by phone.

McCall’s tone in conversations with Bloomberg over the last two-and-a-half months since the deal was made public has, if anything, grown more hardened.

Less than half an hour after the takeover was first announced in December, McCall told Bloomberg News in a phone call that he was wary of the transaction. The union’s preferred bidder, Cleveland-Cliffs Inc., had lost out, and the winning company wasn’t one many in the market had expected.

“This is not how this is going to work,” he said at the time. “We don’t know Nippon.”

By the end of that week, McCall got sharper. He called out US Steel for a “pompous” attitude, criticizing the company for not giving the union advance notice of the deal. And shortly before New Year’s, he chastised Nippon for having sent a representative to his office to simply read from a pre-written script of how the company would honor labor agreements.

By January, he was on the full offensive. Across a wide-ranging 90-minute conversation on the fifth floor of the USW office in Washington, McCall claimed Nippon had no understanding of the full commitments needed by the labor group and said the company had handled everything “arrogantly.”

By late February, he was livid.

“I want to kill this deal,” McCall said in a phone interview. “They haven’t indicated in any way that they’re interested in working with us to assure us that our members and our members’ futures, their employment security, their economic security and their retirement security is guaranteed. The only progress is on an NDA.”

And when pressed on whether he’d still want to kill the deal even if Nippon meets all the union’s demands, McCall first takes a long pause before answering: “It’s a question I can’t answer, unless they’re willing to sit down and talk about the issues.”

Still, at this point, fiery rhetoric works in McCall’s favor. The angrier he seems, the more leverage he has when it comes to sitting down for negotiations. It’s in Nippon’s interest to try to win the union’s favor quickly.

Trump wants to block

Trump has already said that he would block Nippon’s takeover of US Steel “instantaneously.” “We saved the steel industry. Now, US Steel is being bought by Japan. So terrible, but yeah, we want to bring jobs back to the country,” Trump said in late January.

Members of Congress in both parties have also raised national security concerns, including because of the Japanese steelmaker’s exposure to China.

And in response to questions about the deal, top economic aides for Biden said the president aims to preserve union jobs and domestic manufacturing in the US steel sector. The comments publicly hint at the administration’s priorities and the potential scope of the CFIUS review and further highlight why winning over the union will help to smooth over the political process for Nippon.

In recent weeks, people familiar with the matter have said the US national security review of the takeover is unlikely to conclude until late this year. US Steel and Nippon have publicly stated that they still expect the deal to close by the second or third quarter.

The CFIUS panel, led by Treasury Secretary Janet Yellen, can approve, amend or block the deal on national security grounds — or send it to Biden’s desk for a decision.

The Treasury Department declined to comment.

In a statement, US Steel said: “We respect and appreciate the professionalism of the CFIUS process and the important work of the Committee. We are committed to working with the appropriate parties to ensure any national security concerns are addressed.”

The company also cited Japan as an “important ally” of the US.

Right-hand man

McCall became the union’s top official in September, following the death of former president Tom Conway.

McCall was Conway’s right-hand man, who would lay the advance ground work with company officials before top executives and union bosses would gather. Insiders have long viewed McCall as the shrewd negotiator who did the work to secure critical benefits and wage increases.

It’s unclear whether McCall will really follow through on his threats to try and kill the deal. Nippon has, after all, signaled to investors that it will do what’s needed to get the CFIUS approval.

And though the current political moment means McCall currently has a great amount of leverage, that clout will most likely fade after the November election. While US union strength has grown, it’s also true that even the most iconic labor groups, like the USW and the UAW, have seen their ranks plummet from the heydays half a century ago.

So scuttling the deal, only to leave the fate of the workers to the next bidder for US Steel during a less politically ripe moment, may not be the best strategy.

“There is sort of the middle-of-the-road outcome between letting the deal go untouched and blocking it — and that is mitigation to the extent that keeping these strategically important manufacturing jobs in the US is a national security interest,” Sofield of Debevoise & Plimpton said of what could happen during the CFIUS review. “You don’t have to block the deal to make that happen.”

But there is also a personal element to all this that goes beyond the politics.

McCall got his start in the industry at Bethlehem Steel in 1970 at the age of 18 as a journeyman millright. In 1978, he met Conway, at the time a young, unknown Protestant steelworker — an irony to McCall, who’s a Catholic.

Days after Conway’s death, just as McCall was starting to take up the responsibilities of running the union, he had a call with US Steel chief executive officer David Burritt that would set the tone for the relationship he’s had with the company, and now by proxy, with Nippon.

“He said: ‘I hope our relationship can be better than it was with Tom. I didn’t get along with Tom, but I respected his mission,” McCall said. “My best friend in the world passed away and all he could say was he respected his mission.”

(By Joe Deaux)

BHP Group Ltd., the world’s biggest miner, has embarked on a major restructure of its global business, affecting units from mine-planning to decarbonization and heritage protection, according to a report in the Australian Financial Review.

The changes led by chief executive officer Mike Henry will see several specialist teams disbanded and their functions reassigned in a bid to cut costs and simplify operations, the AFR reported, without saying where it got the information. Individual commodity units will have more responsibility to run themselves self-sufficiently, it said, adding that BHP has started shedding jobs in Australia.

“As part of our continuous improvement in how we approach work, we have made some changes to better align work activities within assets and support quicker decision-making,” BHP said in an emailed response to questions from Bloomberg News. It didn’t comment on job cuts.

BHP — a major producer of everything from iron ore to copper and metallurgical coal — suffered a sharp profit slump in its fiscal first half. While that was largely due to a $2.5 billion writedown in its nickel business, most major miners have been hit by cost inflation and softer commodity prices.

In its financial results last week, BHP said the cost of mining was higher than prior to the Covid-19 pandemic, and warned that while prices pressures from energy and logistics had eased, labor costs remained a key risk.

In Australia, BHP’s country president Geraldine Slattery sent a message to staff outlining the changes to functions including health, safety, environment and mine planning.

The AFR report didn’t say how many staff members might be affected by the restructure.

Read More: BHP says nickel faces “difficult multi-year run”

Prices have fallen by nearly 8% since China, the world’s biggest consumer of the key steelmaking ingredient, returned to work on Feb. 19, pressuring Australian mining stocks to four-month lows on Tuesday.

Even Beijing’s biggest-ever cut in the benchmark mortgage rate to revive the ailing property market failed to support prices, which typically get a boost from such stimulus.

The declining prices aren’t necessarily bringing much relief to steelmakers, either, as many of them are still using stocks bought at higher prices even as steel prices have dropped.

China is by far the world’s top steel producer.

“Mills depending more on seaborne cargoes may suffer deeper losses because of higher production costs as the cargoes they consume were bought when prices hovered higher,” said a central China-based steelmaker.

Ore prices had risen following the Lunar New Year holiday last year, and ended the year stronger despite weak Chinese steel demand, defying market expectations.

However, China instructing heavily indebted local governments to delay or halt some state-funded infrastructure projects has cast a fresh shadow on demand, on top of the persistent drag from the property sector.

Many mills chose to draw down inventories instead of placing new orders from the portside market as ore prices fell, according to two Chinese steelmakers and three traders.

“This year might be even harder than last year in terms of garnering profit. We will continue to maintain a low inventory of raw materials,” said a manager at a steel mill in north China.

Both steelmakers requested anonymity as they are not authorised to speak to media.

Thin margins have led steelmakers to hold off from ramping up production prior to the start of peak demand season in March, analysts said.

“Steel markets are weak and there is still little confidence in the economy,” Tomas Gutierrez, head of data at consultancy Kallanish Commodities, told Reuters.

“Beijing’s ability to engineer economic growth by traditional means is fading.”

However, despite stronger-than-usual supply in a typically slower shipment season creating headwinds for iron ore prices, several market participants said they expect prices to rebound soon as a demand recovery looms ahead, with weather increasingly favourable for construction activity.

Average daily hot metal output, a gauge of ore demand, is also likely to rise in coming weeks from its current subdued level, analysts said.

Galaxy Futures said in a note on Tuesday that steel demand may beat expectations in the first half of the year on robust manufacturing and export activity and as funds earmarked for during the fourth quarter for infrastructure spending are released.

(By Amy Lv and Tony Munroe; Editing by Varun H K)

On Monday, Brazil’s government was again reported by local media as trying to interfere in Vale’s succession, after the government had denied earlier this year that it sought to influence the discussions of who would be the next CEO of the company.

(By Andre Romani and Steven Grattan; Editing by Himani Sarkar)

Last month, Vale said its iron ore output, its main business, rose 10.6% in the fourth quarter of 2023 versus a year earlier, to 89.4 million metric tons.

In Monday’s presentation, prepared for a corporate event in the United States, Vale mentioned initiatives aimed to reduce seasonal impacts of heavy rains in Brazil on its iron ore operations at this time of year, such as to prevent flooding in railways transporting the commodity.

The period between November and March is usually impacted by seasonal challenges to Vale related to a higher volume of rain in the miner’s main operations, located in Para and Minas Gerais states.

The company’s iron ore production grew 4.3% in 2023 to 321.15 million tons, topping its own estimate for the year. It expects to produce between 310 million and 320 million tons of iron ore in 2024.

(By Marta Nogueira and Andre Romani; Editing by Marguerita Choy)

However, the union said even with the agreement, Nippon has not provided it with all of the information requested.

The world’s fourth-largest steelmaker’s planned deal has drawn criticism from Democratic and Republican lawmakers and the powerful USW union.

Nippon Steel aims to gain consent from the USW, the main union at US Steel, by emphasizing the deal would strengthen the US company’s profitability and finances, leading to stable employment.

(By Kannaki Deka; Editing by Maju Samuel)

Read More: Nippon Steel’s China assets raise concerns over US deal

The funding from the government’s Low-Carbon Economy Fund will enable Rio Tinto’s Iron Ore Company of Canada (IOC) to reduce the amount of heavy fuel oil that is used in the production of iron ore pellets and concentrate.

The government funding represents about 25% of the total cost of the project, with IOC funding the rest of the investment, Rio Tinto said.

Installation of new equipment will begin in the second half of the year and is expected to be completed in the first half of 2025.

One of the world’s largest iron ore producers, Rio expects to reduce about 2.2 million tonnes of greenhouse gas emissions over the lifetime of the project.

($1 = 1.3518 Canadian dollars)

(By Vallari Srivastava; Editing by Maju Samuel)

Diamond drillhole EFO7D cut 34 metres grading 0.5 gram PGE including 10 metres at 1.2 grams PGE per tonne, 0.2% nickel and 891 parts per million copper from 388 metres down-hole, the company said on Monday. The PGE component includes 10 metres at 0.89 gram palladium, 0.19 gram platinum and 0.1 gram gold, it said.

“The key driver of this discovery is the implementation of artificial intelligence through our alliance partner Earth AI,” Legacy Minerals CEO and managing director Christopher Byrne said in a release. “This is the first confirmed discovery of magmatic-related nickel-copper sulphide mineralization in the 700 km long ultramafic belt that hosts the Fontenoy project.”

Explorers and miners are increasingly turning to artificial intelligence to process big loads of data, streamline operations for increased productivity and spot opportunities to innovate and lower costs. Proponents predict AI will be indispensable to help the industry ramp up the supply of battery metals for the global energy transition to fight climate change. Electric vehicles, for example, need roughly four times as much copper as traditional automobiles.

Faster, cheaper

San Francisco-based Earth AI says it has made mineral deposit discoveries in two out of three tries compared with an industry average of 0.5%. Its predictive technology, trained on remote sensing, geophysical and exploration data, spots nickel, copper, zinc and vanadium prospects more than 100 times faster and cost-effectively than traditional methods, the company says.

“Our AI for mineral discovery is key to the diversification of the global critical metals supply chains by finding maiden deposits in unexplored areas at a fraction of the usual cost,” Earth AI CEO and founder Roman Teslyuk said in a release. “The discovery in Fontenoy, the second for us after the recent discovery of a greenfield molybdenum deposit, confirms that the future of mining lies in our technology.”

The Fontenoy discovery cost A$500,000 in exploration, Earth AI figures. That is 200 times less than the A$100 million spent by KoBold Metals. It’s a start-up also using AI backed by a coalition of billionaires including Bill Gates and Jeff Bezos, which is exploring in Zambia, Quebec and Australia, where it signed a deal with BHP (NYSE: BHP; LSE: BHP; ASX: BHP).

Shares in Legacy Minerals closed A$0.01 higher at A$0.14 apiece on Monday in Sydney, valuing the company at A$14.8 million. They’ve traded in a 52-week range of A$0.11 to A$0.21.

Massive sulphides

The Fontenoy project contains disseminated and veined copper-gold mineralization over a strike length of 8 km, Legacy says. It is interpreted to represent McPhillamys-style volcanogenic hosted massive sulphide mineralization.

A nickel-copper-PGE surface anomalism found south of the discovery intercept is now a priority area for follow up, Legacy said. There’s an opportunity to follow up with electrical geophysics for future drill targeting. Diamond drill planning is underway, it said.

Earth AI, which has an in-house drilling unit, completed three diamond-cored holes for a total 1,633.7 metres at the site about 150 km northwest of Canberra. Fontenoy was historically drilled by companies searching for shallow nickel-laterite deposits but not PGE or magmatic-related nickel-copper sulphide mineralization.

The AI explorer didn’t drill survey holes, but used predictive software to lower costs and speed the search process. It then sampled two-metre areas where sulphides had been logged and sent 283.8 metres for analysis, the company said.

“Mining with the help of AI has recently been at the top of the news, but it is precisely this discovery that is important for the market,” Earth AI said. “Previously, Earth AI discovered a greenfield molybdenum deposit in Australia in a region eight other companies explored and came up with nothing.”

The most-traded May iron ore on China’s Dalian Commodity Exchange ended daytime trade 3.21% lower at 875 yuan ($121.57) per metric ton, the lowest since Oct. 27, 2023, following a drop of over 6% in the past week.

The benchmark March iron ore on the Singapore Exchange was 3.41% lower at $115.95 a ton, as of 0706 GMT, also the lowest since Oct. 27.

“Inventories of iron ore at major Chinese ports rose. Supply concerns also eased, with a cyclone threatening WA (Western Australia) ports now tracking away from the state’s iron ore hub,” analysts at ANZ bank said in a note.

Inventories at major Chinese ports surveyed climbed by 2.1% on-week to 133.1 million tons in the week to Feb. 23, hitting the highest since April 2023, data from consultancy Steelhome showed.

Also, Vale, the world’s second-largest supplier of iron ore, said the latest train incident caused by heavy rains in Brazil would not impact its shipments or production.

Global iron ore shipments hovered at almost the highest level in three years and if the high shipments continue in a seasonally slow season, ore prices can hardly find any support from the supply side, analysts at Sinosteel Futures said in a note.

Dragging down prices of the key steelmaking ingredient was also the bearish near-term outlook for steel fundamentals, Mysteel said.

Construction sites in various places in China have been slow to resume production due to heavy rains and snow, Shanghai Metals Market said.

China’s new home prices extended declines in January, data showed on Friday, despite Beijing’s support to restore confidence in the debt-ridden property sector.

Other steelmaking ingredients on the DCE slid as supply concerns that had contributed to last Friday’s price rally eased. Coking coal and coke were down 4.33% and 2.92%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mostly down.

Rebar slid 1.29%, hot-rolled coil dropped 1%, wire rod decreased 0.98%, and stainless steel lost 0.32%.

($1 = 7.1976 Chinese yuan)

(By Cassandra Yap and Amy Lv; Editing by Subhranshu Sahu and Janane Venkatraman)

But metallurgical coal is also a key input, and this fuel has quietly been a top performer in the energy commodity space in recent months.

Australia dominates the seaborne market for metallurgical coal, accounting for more than half of global volumes, and about three times the shipments of the next biggest exporter, the United States.

The price of Australian metallurgical coal, also known as coking coal, on the Singapore Exchange ended at $315 a metric ton on Wednesday.

The contracts, which are linked to the free-on-board price in Australia, have risen 40.3% since the 2023 low of $224.50 a ton on July 6.

In contrast, high-grade Australian thermal coal is only 0.5% higher than its 2023 low, while Brent crude oil has risen 13.4% from its low in December, and spot liquefied natural gas is down 2.2% from the weakest it was in 2023.

While the price is well below the record $635 a ton reached in March 2022 amid fears to global supplies after Russia’s invasion of Ukraine in February of that year, it’s still well above the broad $100-$250 range that prevailed from 2018 to mid-2021.

Unlike iron ore, which is dominated by China gobbling up more than 70% of global seaborne volumes, coking coal is a more evenly-spread market with demand centres in both the developed countries of North Asia and the developing nations of South Asia.

It’s likely that much of the increase in prices in coking coal in recent years is down to increased demand from India, which has seen imports rise from 53.32 million tons in 2020 to 70.49 million in 2023, according to data compiled by commodity analysts Kpler.

Australia remains the biggest supplier to India, with imports in 2023 coming in at 41.0 million tons, down slightly from 43.22 million the prior year.

It’s worth noting that India has turned to Russian coking coal since Moscow’s war on Ukraine, snapping up discounted cargoes that can no longer go to Europe because of sanctions against Russia.

India’s imports of Russian metallurgical coal rose to 11.76 million tons in 2023, almost double the 6.07 million the previous year and four times the 2.63 million from 2021.

China’s imports of seaborne coking coal also rose in 2023, reaching 36.8 million tons, up from 27.05 million the previous year.

This is largely a reflection of the return of Australian coal to China after Beijing lifted its informal ban, imposed in 2020 amid a series of political disputes with Canberra.

Australia record

Australia’s exports of coking coal have been trending lower in recent years, largely as a result of supply disruptions caused by bad weather in the main producing state of Queensland.

However, they have rebounded in February, with Kpler data showing shipments of 17.86 million tons, the second-highest on record behind the 18.65 million from June 2019.

The strength wasn’t really a China or India story, with Japan leading import growth in February, with Kpler assessing arrivals at a three-month high of 4.56 million tons, of which Australia provided 3.86 million.

South Korea also saw higher imports in February, with arrivals of 3.45 million tons, the most since November 2021, according to Kpler.

The overall picture that emerges for seaborne coking coal is one where demand in Asia is recovering, with Kpler data showing imports by the region rose for a third straight month in February, likely reaching 19.8 million tons, up from 19.46 million in January and the best month since October.

The longer-term outlook is more nuanced, given efforts to reduce carbon emissions in the steel sector.

BHP Group, the world’s largest shipper of metallurgical coal, believes the market has decades of life left in it as the alternatives to using coal to make steel are either not competitive on a cost basis or unlikely to emerge at scale for decades.

However, the company also warned in its results presentation this week that investment in new mines is less attractive, especially in Queensland where the state government imposed sharply higher royalties in July 2022.

While it is to be expected that a company will rail against higher taxes, the trick for BHP is to invest to keep production high enough to meet demand, but low enough to also keep prices strong, but not so low that the Queensland government follows through on its threat to strip the company of its mining licences should it not invest sufficiently.

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

(Editing by Sonali Paul)

Indian exports jumped 170% to 44 million tons last year — most of which went to China — at a time when domestic demand for the raw material is rising. That’s prompted the worst-affected sections of the industry to seek restrictions from the authorities to protect their margins.

“We have asked the government to ban exports of all forms of iron ore — otherwise China’s steel industry will run and ours will shut,” Anil Nachrani, president of the Chhattisgarh Sponge Iron Manufacturers Association, said in a phone interview this week. “India should be an exporter of steel and not iron ore,” he said.

Nachrani said smaller mills in at least five major manufacturing states have banded together to lobby the steel ministry after many became loss-making. Second-tier producers, which account for about 40% of nationwide output, have been paying almost four times more than bigger operations, he said. India’s top mills can negotiate better prices for inputs like iron ore and coal and often have their own mines.

Any move by India to limit exports could underpin iron ore prices, one of the worst-performing major commodities so far this year. The government has stepped up in the past to safeguard the interest of local producers. In May 2022, it imposed a 50% export tax on all grades of iron ore to reduce costs and improve supply. The measure was withdrawn six months later.

India’s steel ministry didn’t immediately respond to an emailed request for comment.

The growth in capacity at India’s big steelmakers has boosted demand locally and intensified competition for the material at auctions and in the open market. But at the same time, end-user demand for steel remains soft, which is squeezing margins for smaller players.

“Demand has been weak on the one hand, and on the other hand they are not able to compete with major producers who have captive coal and iron ore mines,” said Deependra Kashiva, director general at the Sponge Iron Manufacturers Association, a national body.

(By Swansy Afonso)

Operations resumed at Cape Preston West and Varanus Island, according to a statement from Pilbara Ports Authority late Friday. The two harbors, along with Dampier and Ashburton, had been cleared in anticipation of the system making its way south toward the region.

Australia’s west coast is the nation’s most important region for the production and export of iron ore, and also includes a number of oil and gas operations. The storm is forecast to miss major mining sites in the Pilbara region, but could impact the state’s major banana-growing region at Carnarvon.

Ex-Tropical Cyclone Lincoln, currently offshore, is expected to turn to the south toward the far west Pilbara coast overnight and re-intensify, according to a notice from Australia’s Bureau of Meteorology. On Saturday, the system will most likely pass just to the west of the Exmouth-Ningaloo area, and then cross the Gascoyne coast before weakening inland on Sunday.

The port of Dampier is used by Rio Tinto Group to export iron ore. The company, the world’s biggest miner of the steelmaking commodity, didn’t immediately reply to requests for comment.

(By Jason Scott)

That company was called Allied Mining and Processing and you’ve probably never heard of it. But from small roots this tiny outfit grew into one of Australia’s largest listed companies with a market cap exceeding A$88 billion. 

Twenty years ago, Andrew (Twiggy) Forrest renamed this micro-cap stock to Fortescue Metals Group (ASX: FMG). The rest is history, but it was quite the story behind Twiggy’s road to immense wealth. 

Fortescue was perhaps the single biggest success story from the last mining boom. A stock that grew from a measly A2¢ per share back in 2003 to more than $10 a share just five years later. 

It seems absurd, but that’s around a 50,000% return. 

Junior iron ore miners were the poster child from the early 2000s China-led commodity rush. However, it wasn’t a smooth road to success.  

You see, back in 2003, Forrest was looking to break into the monopolized iron ore market, a sector dominated by mining giants Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) and BHP (NYSE: BHP; LSE: BHP; ASX: BHP). 

At the time, his ambitious venture was mocked by analysts and journalists. 

Accessing cash to build a capital-intensive iron ore operation was near impossible in the early 2000’s. Sure, iron ore mining in Australia is relatively cheap and relatively easy to extract. Simply load rock on a boat and ship it to China’s massive steel refineries.  But few consider the vast infrastructure required to get to that point. Iron ore is a bulky commodity. 

Mine feasibility studies must include costs that extend well beyond the mining operation: railways, ports, loading facilities. It’s this barrier to entry that enabled the majors to retain their grip over iron ore supply in Australia. Yet these challenges didn’t deter Forrest. 

Similar to today’s evolving energy transition story, China was emerging as a powerful source of demand for iron ore. In 2003, the country’s GDP was surging at around 9% per year. But few predicted this growth would continue, and fewer still could have comprehended the incredible trajectory of iron ore prices over the next five years.  

In 2003, the global economy was reeling from a tech bust and terrorist attacks, with iron ore prices sitting below $20 per tonne. 

History repeating?

2023 was a terrible year for most commodities — especially those tied to the renewable energy trend. That’s despite investment in renewable energies hitting an all-time high in 2023 at $1.8 trillion. 

According to BloombergNEF that was up 17% from 2022. Yet, junior mining stocks have endured back-to-back years of underperformance. 

But while the mainstream narrative turns bearish on critical metal stocks, the world’s most liquid insiders continue to build exposure. That includes mining tycoons Andrew Forrest, Gina Rinehart and Robert Friedland. 

These heavyweights are still long on the critical metals mega-theme.  

Have no doubt, the spoils will go to those who are able to stick with these gargantuan commodity trends. Twenty years ago, that was iron ore: a commodity that was slow to respond to China’s rampant growth before a massive takeoff. 

By 2005, iron ore prices had almost tripled reaching $50 per tonne. Three years later and the price was hovering just below $200 per tonne — almost a 10-fold surge in five years. 

Liquidity challenges stalling new mines

Ultimately, higher iron ore prices turned Andrew Forrest’ iron ore ambitions into reality, despite steep development costs. 

Which brings us back to today’s market. In a case of history rhyming, critical metal developers sit at the edge of enormous opportunity. It’s why I like to say critical metals stocks are the iron ore developers from 2003. 

Sitting at the precipice of a major upward leg in the commodity cycle — yet hobbled by enormous cost of capital required to get projects underway. 

Just like it did with iron ore in the early 2000s, expect downbeat sentiment to shift rapidly in line with rising prices. 

This is how commodity cycles work. This is how inconceivable capex finds its way into new projects. But don’t take my word for it — watch the world’s biggest insiders and follow their lead. 

James Cooper runs the commodities investment service Diggers and Drillers. You can follow him on X @JCooperGeo.

Vale, one of the world’s largest iron ore producers, reported a $2.42 billion net profit for the quarter ended in December, compared to $4.15 billion expected by analysts polled by LSEG.

Vale’s bottom line took a hit from $1.2 billion tacked on to its provision related to the 2015 collapse of a tailings dam, which caused a giant mudslide that killed 19 people and severely polluted the Rio Doce river.

The total provision now stands at $4.21 billion, up 40% from the third quarter.

BHP, Vale’s partner in the Samarco joint venture that owned the dam, said last week it would record another $3.2 billion impairment related to the case.

Other results tracked analyst expectations. Recurring adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 37% in the quarter, and sales revenue rose more than 9%.

Analysts at RBC Europe Limited said they anticipated a positive response, noting that Vale’s guidance remains unchanged and free cash flow beat its expectations.

Also on Thursday, Vale said its board approved a payout to shareholders of about $0.55 per share.

Over the quarter, the miner said its iron ore prices had averaged $118.30 per metric ton, up from the $95.60 per ton in the year-earlier quarter.

Vale boosted investments by about a fifth from October to December compared to the same period a year before, spending $2.1 billion in projects focused on iron ore as well as energy transition metals such as nickel and copper.

Vale’s earnings come amid uncertainty over succession at the helm of the company, with its board divided between re-electing current chief executive Eduardo Bartolomeo and choosing a new name.

As well, Vale this week said its operating licenses at two mines were suspended by environmental authorities, which RBC Europe Limited said could pose “risks around operational continuity.”

(By Andre Romani, Peter Frontini, Marta Nogeuira and Daina Beth Solomon; Editing by Anthony Esposito and Michael Perry)