Daily iron ore price update (Fortescue goes to Africa)

The iron ore price complex had a big advance on Thursday, with coking coal up 5% at one stage, while spot prices jumped nearly 4%, all fuelled by hopes of recovering steel production after official curbs in the first 11 months of the year.

Meanwhile, I thought Fortescue was going green? No sir – they are off to Africa to dig more iron ore, this time for high grade stuff:

Fortescue Metals Group said on Wednesday it had entered an agreement with the Gabon government to study the development of an iron ore project in the West African country.

The Belinga iron ore project, located in the northeast of Gabon, has been progressively assessed by Fortescue since 2018 and is potentially one of the world’s largest undeveloped, high-grade hematite deposits.

The agreement will include a 36-month exclusivity period over the 5,500 square kilometre area, with Fortescue to create a Gabon mining company, owned 80% by Fortescue, to hold the tenure over the project.

“Fortescue is pursuing global opportunities in iron ore that align with our strategy and expertise,” Chief Executive Officer Elizabeth Gaines said in a statement.

“We look forward to working with the Gabon Government on this project as we continue to invest in assets to optimise growth and returns in our iron ore business.”

Fortescue, which aims to become carbon-neutral by 2030, has been emphasizing its push to transition from a pure-play iron ore producer to a green energy firm over the past year, signing a string of green energy projects, which some investors have called grand in their ambition but lacking detail.

The miner is already readying its operations to run on hydrogen, developing fuel cell vehicles like trucks, trains and buses, and eventually aims to fuel ships and even produce “green iron”, which could be used to make steel without burning dirty coking coal.

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