Iron ore prices fell on March 17, 2021 though the market was generally stable:
I remain of the view that the peak is effectively in. We will see firm pricing until May then drop sharply ina series of steps through the year.
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The newsflow is all about more supply. Vale is on track again:
Vale states that it is gradually starting up operations at its new tailings filtration plant at the Vargem Grande Complex, this being the first of four filtering plants that will be installed in Vale’s operations in Minas Gerais, totalling a US$2.3 billion investment between 2020 and 2024. In addition to reducing the need to use dams, being replaced with dry stacking, the start of operations will allow an improvement in the average quality of Vale’s product portfolio with the use of wet processing on the site.
In the filtration process, the water present in the iron ore tailings is reduced, allowing most of the material to be stacked in a solid state, thus reducing dependence on dams. Still in 2021, it is expected to start the operation of the first filtration plant in the Itabira Complex. Over the course of 2022, the second filtration plant at the Itabira Complex and the first at the Brucutu site will start operating. The four tailings filtration plants will serve processing plants that total a capacity to process 64 Mt/y of iron ore.
The addition of 4 Mt/y of capacity, as previously announced in the Production and Sales Report, on February 3, 2021, will take place from the 3rd quarter of 2021 along with the start-up of the Maravilhas III dam, which is in the final stage of construction and will receive only the ultrafine tailings from the plants, equivalent to approximately 30% of the total tailings generated from this operation. The beginning of the tailings filtration operations in Vargem Grande is another step in stabilising iron ore production and on the way to the return of the production capacity of 400 Mt/y at the end of 2022, says Vale.
And more is coming from Australian juniors:
|Firm||Project||Capacity (mn t/yr)||Start date||Fe (%)|
|Fenix||Iron Ridge||1.25||Dec ’20||64|
|Nathan River Resources||Roper Bar||2||Nov ’20||58.5|
|NT Bullion||Frances Creek||2||early ’21||59|
|Strike Resources||Paulsens East||1.5||late ’21||62 lump and 59 fines|
|Venture Minerals||Riley||1||Q2 ’21||57|
|Iron Road||Central Eyre||12||66.7 (magnetite conc)|
|Grange Resources||South Downs||10||69.5 (magnetite conc)|
|Atlas Iron||McPhee Creek||14||56.3|
|Macarthur Minerals||Lake Giles||47 (magnetite ore)|
|Mineral Resources||Ashburton Hub||25-30||5|
Another 6mt this year then 20-30mt next year from the majors. Most of these larger junior plays will never see the light of day as prices crash again.