Anglo Pacific buys iron ore royalty stake, seeks more deals
London-listed Anglo Pacific Group has bought a 4.25 percent stake in Canada’s Labrador Iron Ore Royalty Corp (LIORC) for $50 million and hopes to do two more deals this year to broaden its portfolio, the company said on Thursday.
Anglo Pacific shares were up 2.5 percent by 1053 GMT, while the wider sector had gained 1 percent.
Chief executive Julian Treger said the deal locked on to Chinese demand for high-quality iron ore, used in steel-making, which has traded at a premium over lower-quality, more polluting grades as the world’s biggest commodity market seeks to reduce its emissions.
He said the group, the only mining royalties company listed in London, aimed to do further deals.
“Our intention would be to make another two acquisitions this year, one development royalty and one producing royalty,” he said in a telephone interview.
A mining royalty provides the holder with the right to a share of revenue, profit or production. Historically royalties resulted from the sale of a mineral property, but increasingly they are created by operators or developers as a source of finance.
Anglo Pacific’s profits have risen as miners struggling to raise capital on equity markets have increased their use of development royalties.
The company in March said its income from mining royalties increased 90 percent last year and its free cash flow more than tripled, positioning it to acquire a broader range of royalty assets.
Its flagship royalty is for the Kestrel mine in Australia, which Rio Tinto sold early this year as it ended its exposure to coal production. Kestrel’s output has since risen, boosting Anglo Pacific’s earnings as it retained the royalty despite Rio’s mine sale.
Thursday’s deal cuts Anglo Pacific’s percentage exposure to coking coal to 41 percent from 49 percent, while its iron ore exposure rises to 20 percent from 5 percent.
LIORC has a 15 percent stake in the Iron Ore Company of Canada (IOC), which is 59 percent owned by Rio Tinto and 26 percent by Japan’s Mitsubishi Corporation.
Sources say Rio Tinto is looking at a sale or a public listing of the IOC unit, which Treger said could give LIORC a further boost. Rio Tinto said it could not comment.
Source: REUTERS
Australia’s Mount Gibson expects iron ore sales to slip in 2018-2019
Australian iron ore miner Mount Gibson said Wednesday that it is expecting sales of its product to ease in fiscal 2018-2019 (July-June), and for all-in group cash costs to rise, as it wraps up production from its Mid West operations and prepares to restart the high grade Koolan Island project.
The miner has given iron ore sales guidance for the current fiscal of 2.7-3.3 million wet mt, which compares with actual sales of 3.6 million wmt in fiscal 2017-2018. All-in group costs are pegged at A$52/wmt-A$57/wmt ($37.56/wmt-$41.17/wmt) FOB, up from A$45/wmt in the last fiscal, it said.
Mount Gibson is planning to complete mining at its Mid West business later this year, and commence ore sales from its Koolan Island project in January-March next year.
Shipments from the Mid West operations, which include Iron Hill and Extension Hill, are expected in the March quarter next year, while the Koolan Island project is over 80% complete and scheduled to start sales in the same quarter, the company said.
The miner expects the average grade of Koolan iron ore to be 65.5% Fe, which compares to Iron Hill, which typically sees a grade around 59% Fe for its standard direct shipping ore fines.
Almost 70 million mt of high grade (67% Fe) iron ore was mined by BHP from Koolan Island from 1959 to 1993. Operations were suspended in November 2014 following a seawall failure, which resulted in the flooding of the main pit.
Site cash cost guidance for the Mid West operations for 2018-2019 is A$38/wmt-A$42/wmt against Koolan Island, which is A$70/wmt-A$75/wmt.
Source: S&P GLOBAL PLATTS
Sponge iron makers urges steel min to ensure raw material supply
The Steel Ministry assured sponge iron producers that steps would be taken to address their concerns as the industry pitched for ensuring availability of non-coking coal and checking rising prices of iron ore.
Steel Minister Chaudhary Birender Singh at a conference here said that steps will be taken to address the concerns of the sponge iron industry.
Without elaborating on the steps, he stressed that the ministry has always taken action required in a particular situation.
Sponge iron producers are facing issues like interrupted supply of raw materials and high prices of iron ore, Sponge Iron Manufacturers Association (SIMA) Executive Director Deependra Kashiva said on the sidelines of India International DRI Summit here.
The industry urged the steel ministry to ensure availability non-coking coal and check rising prices of iron ore, he said.
“We have told the minister the issues being faced by sponge iron manufactures in India. Iron ore is coming at very high rates. Iron ore rate varies from state to state and non coking coal which is very much available in the country is being imported from countries like South Africa to run the units. The non coking coal is being diverted to power plants,” Kashiva said.
Sponge iron or direct reduced iron (DRI) is used in producing semi-finished steel items, ingots and billets, which are further used to make various finished steel items. Iron ore and non-coking coal are main raw materials used to produce sponge iron.
The minister noted that India’s sponge iron production has grown 25 per cent to 28.5 million tonnes in last four financial years, he said.
“The National Steel Policy 2017 lays out an ambitious growth path for India’s sponge iron industry. Sponge Iron production is anticipated to reach 80 million tonnes by 2030-31,” the minister said.
While acknowledging that the sponge iron industry plays an important role in providing employment, Singh said that “gas-based plants have been facing challenges like non availability of gas. These issues have been also taken up by the ministry.
I am sure in the coming years, gas availability will improve further. By 2031, share of gas based capacity is expected to grow to about 30 per cent.
Source: PTI
KIOCL & RINL JV iron ore pellet plant to come up in Vizag
Board of KIOCL Limited, formerly Kudremukh Iron Ore Company Ltd, a public sector organisation under the Ministry of Steel, has approved the technoeconomic feasibility report (TEFR) for establishing a two million tonne iron ore pellet plant in Visakhapatnam with an investment of INR 900 crore.
KIOCL Ltd entered into a joint venture with Rashtriya Ispat Nigam Limited (RINL) last year for the greenfield pellet plant. The supply of pellets, going by the present cost, will benefit RINL by at least INR 2,000 per tonne towards freight cost. At present, RINL is meeting its pellet requirement with supply from Mangalore.
In an exclusive interview, KIOCL Ltd CMD MV Subba Rao told The Hindu that they were expecting a detailed project report from MECON by this month-end, after which they would start work on the project in an area of 75 acres to be allotted by RINL at Ukkunagaram. The steel plant is located at Ukkunagaram.
Stating that the plant would be commissioned by 2021, he said they had supplied three lakh tonne of pellets to RINL last year.
He said their board had cleared the proposal for setting up of a two lakh tonne ductile iron span pipe unit, two lakh tonne coke oven, and a 10 megawatt power plant using waste gases with a total investment of INR 850 crore at Mangalore. The deadline set for completing the project is 2020.
KIOCL Ltd is also exploring the possibility of establishing a 1.5 million tonne pellet plant in collaboration with SAIL Bokaro Steel Plant. Admitting that they had closed the captive mines at Kudremukh in 2006 due to environmental issues, he said they had obtained statutory clearances for mining in 475 hectares in Bellary, Karnataka. It would provide KIOCL Ltd the much-needed raw material security, he remarked.
Source: THE HINDU