Three small Australian iron ore mines have either restarted or opened for the first time in the past month, as small- and medium-size enterprises look to feed into an iron ore market dominated by firmer steel demand, low stocks and limited new supplies.
Australian firms GWR, Nathan River Resources and NT Bullion have begun operating iron ore mines at different locations in Western Australia (WA) and Northern Territory (NT) in the past month, as confidence grows that firm steel demand, lower stocks and supply issues will support strong prices into 2021.
The marginal producer is looking to return across Australia, boosted by a stronger outlook for iron ore prices. Australian iron ore producer Fortescue Metals' Chinese steel-producing customers have full order books through the second quarter of 2021 and into the third quarter, driven by strong demand for steel from infrastructure projects and manufacturing. "I expect strong market dynamics for all of 2021," the firm's director of sales and marketing Danny Goeman told investors today.
This optimism is feeding Australia's entrepreneurial smaller iron ore mine industry.
Nathan River Resources shipped its first cargo from its 1.5mn-2mn t/yr Roper Bar mine to China last month and is preparing its second shipment. It hopes to ship 6mn t of 58pc Fe ore over the next three years and should remain economic down to prices of around $60/t cfr China.
NT Bullion has begun transport iron ore by rail to Darwin from stocks at its 2mn-3mn t/yr Frances Creek mine in the NT and plans to restart mining early in 2021. The mine was closed in 2015 when iron ore prices fell below $50/t cfr China, causing its owner trading firm Noble to write off $93mn in operating losses.
GWR has start mining next week at its 1mn t stage one iron ore project in the C4 deposit at the Wiluna West venture in the Goldfields region of WA. It is already looking at options to expand the scope of the development to include more than the 21.4mn t C4 deposit, which has an average grade of 60.7pc Fe.
These projects join several small iron ore mining and exploration firms in Australia looking to bring on lower grade iron ore mining capacity to take advantage of higher prices, including Strike Resources' Paulsens East iron ore project in the WA's Pilbara region, Venture Minerals' Riley project in Tasmania and Iron Road's Central Eyre iron ore project in South Australia.
The gap for Australian lower grade iron ore has widened because stocks of the material were sold in early 2019 when prices were strong and have not been rebuilt.
Argus yesterday assessed the ICX iron ore price at a six-year high of $149.15/t cfr Qingdao on a 62pc Fe basis, up from $132.50/t on 30 November and up from $93.50/t a year earlier. It assessed the lower grade 58pc Fe price at $134/t cfr China, up from $120.50/t on 30 November and from $81.75/t a year ago.
