Andrada Mining acquisition elevates the miner to emerging mid-tier status. Watch the video here.
Very significant if you appreciate how the dots are lined up.....
Présidence de la République du Congo - Officiel
@PR_Congo
#Cooperation|
Le Président de la République, Son Excellence Monsieur @SassouNGuesso_
, a eu des échanges, en tête à tête, avec Son Excellence Monsieur Mohamed bin Zayed Al Nahyan, Président des Émirats Arabes Unis à Abu Dhabi, ce Lundi 12 février 2024, sur des questions bilatérales et multilatérales.
#Cooperation |
The President of the Republic, His Excellency Mr. @SassouNGuesso_, had face-to-face discussions with His Excellency Mr. Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates in Abu Dhabi, this Monday, February 12, 2024, on bilateral and multilateral issues.
https://twitter.com/PR_Congo/status/1757313392677646369
Bring it on
99 - Your continue to deny/ignore reams of current research that is readily available. I think you need to read it.
99icecream. I cannot see the analogy to the EV market.
Whilst any car maker could produce an EV, if they so wished, no amount of wishful thinking would enable a Pilbara mine to upgrade their hematite-goethite dross to DR grade. None. There *MAY BE* a technological breakthrough in ore smelting (where research efforts are currently focused) however the big boys have been trying for almost a decade now with no success. Hence the interest in West African high grade.
Here's another piece from December that spells out their problem. The Pilbara is struggling to make benchmark 62%...
26 December 2023
THE AUSTRALIAN IRON ORE INDUSTRY MUST DECIDE HOW TO REPLACE ITS AGEING PILBARA MEGA-MINES IN THE FACE OF THE UNCERTAIN SHIFT TO GREEN IRON AND STEEL PRODUCTION.
The standard 62pc Fe direct-shipped iron ore produced in the Pilbara region of Western Australia (WA) is not very suitable for existing processes to produce low-carbon or green iron and steel, and the lower-grade ores that have grown in volume in the past decade are even less so. Yet Australian mining firms BHP, Rio Tinto and Fortescue are all working on multi-billion dollar plans to replace depleting mines.
The question for these firms that have worked hard to build reputations for having high-investment hurdles to ensure that only the best projects are undertaken, is whether Pilbara hematite will be able to compete globally in a low-carbon future.
Rio Tinto and Fortescue are already hedging their bets with developments in Africa, and in Fortescue's case, with producing higher-grade magnetite concentrate in the Pilbara. BHP has maintained its focus on pushing down costs and incrementally improving the grade of its existing Pilbara operations back towards 62pc Fe.
https://www.argusmedia.com/en/news/2522387-viewpoint-australias-green-steel-future-uncertain
99icecream - Care to explain why the Big 3 are going to so much time and trouble to try (repeat try) to convert their rust and rubble to DR grade? Why have BHP and Rio publicly joined forces to try and find a technological solution? Why are they so desperate?
Why are Rio and Fortescue seeking out DR grades in Africa, if they could up their Pilbara grades, as you claim? Is it because they realise that the there isn't likely to be a techno breakthrough?
If they could raise the grades of their Pilbara junk then *NONE* of the above would be necessary.
Yet that is *EXACTLY* what is happening.
Why are the media and analysts uniformly detailing their predicament? Are they all wrong?
Please enlighten....
Further confirmation today from the IEEFA that the Pilbara cannot produce any (meaningful amount) of DR-grade iron ore - (1). The reason being is that the predominant hematite-goethite rubble *CANNOT* be beneficiated - (2). This leaves the Australian Big 3 up the proverbial creek. Here's the IEEFA on their workarounds. Note the key phrase, 'Rio Tinto and Fortescue are planning major projects in Africa to increase their production of high-grade iron ore.'
CARBON CAPTURE FALLS EVEN FURTHER BEHIND AS BHP, RIO AND BLUESCOPE COLLABORATION ACCELERATES GREEN STEEL TRANSITION
February 12, 2024
However, DRI-EAF requires a higher grade of iron ore than the great majority of production in the Pilbara, Western Australia. A shift away from coal-consuming blast furnaces to DRI is therefore a major long-term challenge to Australia’s biggest export.
Three of the Big Four iron ore minors are consequently planning to increase production of higher, direct reduction-grade (DR-grade) ore.
Vale – already the world’s largest producer of DR-grade ore – is planning to increase production in an attempt to fill the 70 million tonnes per annum (Mtpa) DR-grade ore supply gap it sees emerging by 2030 as DRI-based steel production grows.
Rio Tinto and Fortescue are planning major projects in Africa to increase their production of high-grade iron ore. Fortescue has already begun production at Iron Bridge in the Pilbara, where output meets DR-grade.
The outlier among the Big Four is BHP, which is not targeting high-grade ore and is instead leaning more heavily on unproven carbon capture solutions that would allow the continued use of its metallurgical coal.
(1) - https://ieefa.org/resources/carbon-capture-falls-even-further-behind-bhp-rio-and-bluescope-collaboration-accelerates
May 2023; WHY MAGNETITE WILL BE CRUCIAL TO AUSTRALIA’S GREEN STEEL TRANSITION
With available technologies, the steel industry’s transition towards DRI requires a significant supply of high-grade iron ore, but the typical hematite-goethite ores found in the Pilbara region are not suitable for beneficiation to higher grades.
(2) - https://reneweconomy.com.au/why-magnetite-will-be-crucial-to-australias-green-steel-transition/
I think we are broadly on the same page, 99. In essence:
Zanaga starts low in the ground, but can reach very high.
Pilbara starts middling and cannot be beneficiated much further, certainly not to DR grade.
That's the difference and, in a world of Green steel, it's a very big difference.
On the contrary, 99icecream! Zanaga has to be beneficiated up to 66% rising 68.5% for the magnetite, that much we know. However the 'premium' Pilbara Blend, following beneficiation of their ores, has a benchmark 62%Fe. However, and as I understand it and after decades of resource depletion and cherry picking of the best grades, now barely makes benchmark at 61.6% - and from here it's only going down.
Australia is touting themselves as a green steel hub on the basis that the Pilbara has the sunshine and wind power to produce green hydrogen. The inconvenient truth is that they don't have the crucial DR grades in the required volumes. Hence the scramble....
9th Feb 2024, PUSH TO SAVE IRON ORE GOLDEN GOOSE
The risk that Australia’s most lucrative export industry could be hit by the clean energy transition has prompted mining rivals Rio Tinto and BHP into a collaboration to prove local iron ore can be used to make green steel.
The project with steelmaker BlueScope at Port Kembla, south of Sydney, is aimed at fast-tracking the path to nearly carbon-free steel production and protecting a golden goose expected to generate $131 billion in 2023-24, according to official government forecasts.
Under the initiative, the three companies aim to develop a pilot plant that will prove production of molten iron from West Australian ores is feasible using renewable power in direct reduced iron process technology, and in doing so, future-proof the Pilbara.
THE PROJECT AIMS TO HEAD OFF THE RISK THAT IRON ORE FROM THE PILBARA, WHICH IS LOWER GRADE THAN ORES SUITABLE FOR OTHER, MORE ADVANCED, GREEN IRON AND STEEL TECHNOLOGIES BECOMES INCREASINGLY DISCOUNTED OR FACE DECLINING DEMAND AS IMPORTERS STRIVE TO MEET NET ZERO EMISSIONS TARGETS.
https://www.afr.com/companies/mining/green-steel-push-unifies-rivals-rio-bhp-and-bluescope-20240208-p5f3k8#:~:text=While%20several%20green%20steel%20production,the%20bulk%20of%20global%20production.
They're getting desperate in Pilbara, to the extent that arch rivals BHP and Rio Tinto are being forced to team up. The issue is that the Pilbara's low grade rust and rubble (56% to 62% Fe) won't make DRI-EAF green steel - which means that BHP's and Rio Tinto's gargantuan deposits face being stranded, which is a company-breaking problem.
So the 2 have joined with BlueScope Steal to see if they can find a way of smelting the dross into green steel. Good luck with that.
https://www.bloomberg.com/news/articles/2024-02-08/iron-ore-rivals-bhp-rio-linking-up-to-develop-green-steel
https://www.smh.com.au/business/companies/australian-green-steel-a-step-closer-as-iron-ore-rivals-bhp-and-rio-team-up-20240209-p5f3pg.html
> Short of a technological miracle, they're stuffed. As the SMH puts it:
Rio, BHP and Fortescue Metals Group produce almost two-thirds of the world’s seaborne iron ore from WA. Typical iron ore from the region has a grade of between 56 per cent and 62 per cent, making it largely unsuitable for producing direct reduced iron — a material produced by deploying natural gas to remove oxygen from premium ores.
>> Just as soon as Zanaga can get their reports in order (restated FS, financial model and hence an updated NPV) then there'll surely be a bidding war by those strategic partners.
Thanks V10, and there's more from Mining Indaba. Rio on Simandou's 66%+ being 'caviar':
THE SIMANDOU PRODUCT of more than 66% iron content will be the caviar of iron ores as the “normal” iron content is only 58%, Gerard Rheinberger told Business Report at the sidelines at Mining Indada in Cape Town.
“The high grade and low impurities make the Simandou product a premium grade product and that will help the world’s steel makers reduce their carbon footprint. It will also be less energy intensive as instead of going the blast furnace route, Simandou can be used in direct reduction iron (DRI) kilns or blended with scrap steel in electric arc furnaces (EAF),” he said.
https://www.msn.com/en-za/news/other/simandou-will-produce-the-caviar-of-iron-ore-says-rio-tinto/ar-BB1hW0Bd
> Simply a matter of time (a couple of weeks if not days) before Zanaga is talked of in the same way.
Indeed so Marcus. And here's the link I forgot to add:
https://seekingalpha.com/article/4667975-simandou-project-rio-tinto-bet-on-green-steel
A timely and pithy piece from Seeking Alpha today. Analysts are fast coming round to the realisation that high grade iron ores are the crucial input to the DRI-EAF Green Steel process.
Sooner or later, and I now think sooner, we will be substituting out 'Simandou' for 'Zanaga' and then the brakes will be off the SP.
Some edited highlights:
THE SIMANDOU PROJECT: RIO TINTO'S BET ON GREEN STEEL
The Simandou Project
Simandou is located in Guinea, West Africa, and is home to the world's richest undeveloped deposits of high-grade iron ore. The iron content of 66-68% (compared to the conventional 62% benchmark grade) is considered an increasingly important advantage as it reduces carbon dioxide emissions during steel production.
Economics
Simandou's commercial reserves are estimated to be in the range of 2.4 to 4 billion tons of high-grade iron ore, the total planned capacity stands at 120Mtpa which is roughly 5% of the current global seaborne supply.
For Rio Tinto, Simandou's appeal is the high quality of the ore, a quality that cannot be found in Australia.
IT IS EXPECTED THAT THE SUPERIOR GRADES WILL ULTIMATELY FETCH A SUBSTANTIALLY HIGHER PRICE THAN THE STANDARD WHEN THE DECARBONIZATION OF STEELMAKING BECOMES REALITY.
Premium grades with higher iron content are already more expensive than the ones containing less iron. Blast furnaces need more coking coal to process lower-grade iron ore, a fact that became particularly important when prices for coal skyrocketed triggered by supply issues during the COVID-19 pandemic. Additionally, the usage of higher-grade ore reduces emissions, an increasingly important factor when considering stricter environmental regulations in China which regularly lead to production curbs to reduce pollution or the rising costs for carbon emission rights worldwide.
From the FMF in January. ZIOC surely opened all those doors...
Andrew Trahar, partner at Vision Blue Resources, a Guernsey-based private equity firm, lauded Saudi Arabia for a clear vision and strategy to seek investments after banks and equity capital providers reduced mining funding over the past decade.
“This is a very refreshing feeling,” said Trahar, who founded Vision Blue with former Xstrata CEO Sir Mick Davis. “We’ve had a huge number of meetings here, fantastic engagement, lots of support from the Ministry of Industry and Resources, so we’re going away with the next steps identified and we’re back in a month already.”
https://www.mining.com/at-saudi-arabia-forum-buzz-word-is-partnership/
What ZIOC reported in Nov 2022 on the Glencore deal:
Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
"The acquisition of Glencore Projects' shareholding in the Project is a key milestone for ZIOC's shareholders, demonstrating to third party investors that the Project is now represented by a single entity and management strategy. The Acquisition is value accretive to Shareholders and increases effective equity ownership of the Project by existing Shareholders, enhancing their look-through ownership of the Project and securing control of the Project without paying any premium for such interest.
Furthermore, entering into the Marketing Agreement with Glencore International now provides comfort to investors and financiers that the Project's future production is underpinned by one of the largest iron ore traders globally."
Mattradio - You left off the important part:
'Iron ore Mineral Resources and Ore Reserves have not been re-estimated since 2015 (refer earlier Glencore reports). Glencore is no longer an active participant in the previously-disclosed Zanaga project. The remaining iron ore projects are not financially material to the Group and are, therefore, not reproduced in this report.'
> In other word, Zanaga *IS* financially important. Glencore might now be just shareholders, but they are shareholders with 2 BoD members and a LoM off take pencilled in.
Let's hear it for the Institute for Energy Economics and Financial Analysis. In a report published earlier this morning, the IEEFA have laid out up the upcoming demand for high grade iron ore to feed the DRI-EAF process - and thereby produce green steel. Some highlights:
KEY FINDINGS
Green hydrogen-based DRI has emerged globally as a key technology to reduce primary steelmaking emissions, which also constitute the great majority of iron ore miners’ Scope 3 emissions. However, DRI production requires a higher grade of iron ore with a greater iron (Fe) content than that used in coal-consuming blast furnaces. Direct reduction (DR)-grade ore has an Fe content of 67% or more. A global steel industry shift from blast furnaces towards DRI will drive a significant shift in the quality profile of traded iron ore.
(and)
Meanwhile, Asian steelmakers including Japan’s Kobe Steel and JFE Steel are targeting DRI production in the Middle East, which is already an established user of mature DRI technology.
The global steel technology shift away from blast furnaces is accelerating and **DEMAND FOR SUITABLE IRON ORE IS SET FOR SIGNIFICANT GROWTH.** DR-grade ore makes up only a small fraction of overall iron ore trade, and Australian iron ore miners have long focused on lower-iron content, blast furnace-grade ore in response to the huge growth in blast furnace-based steel production in China over the previous two decades.
The benchmark 62% Fe iron ore produced in the Pilbara is not suitable for existing DRI processes and the quality being produced in the last decade has been falling, making it even less suitable.
https://ieefa.org/resources/big-iron-ores-long-term-strategies-diverging-face-steel-decarbonisation
ZIOC, 28th Dec 2023:
A major Project update is underway to freshen historical studies in light of changes in the world's economy and growing demand for low-carbon steel production, for which the Zanaga resource is highly suited, with the potential to become one of the largest producers of high grade premium pellet feed iron ore.
https://www.lse.co.uk/rns/ZIOC/mou-signed-with-cmec-and-fs-process-update-g59wn18fndidx6z.html
Congrats to Veteran10 for eeking out a reply from the company as to future messaging from Marty Knauth. So...'the company are working on some things..' before messaging. What might they be?
Leaving aside the practicals (beneficiation, pipes, ports etc), all of which are technically doable, the crucial hurdle is convincing the financiers that the project is sound, and for that the company have revealed that 'market enquiry and financial modelling' is underway.
I'm sure that ZIOC now know the current NPV for Zanaga (assuredly markedly higher than the 2014 version) and this will have been conveyed to equity investors, those looking to secure a percentage of the off take.
In this context a look at Marty's LinkedIn 'likes' is most informative. He has 'liked' a post by Ahmed Althubaiti (AA) alongside Bandar AlKhorayef at last month's FMF in Riyadh. AA is the Director of Mining Investment at the Saudi Mining Ministry, having previously worked at Ma'aden. Hmmmm.
More recently Marty has 'liked' a comment on AMC Consultants (1). AMC 'exist to help miners find smarter ways to mine and unearth hidden business value', and 'AMC has been providing world class technical advice to the mining industry for more than 40 years. From feasibility studies to expert geotechnical audits (etc).' and 'AMC Advisory is a specialized team of AMC Consultants focused on providing exemplary whole-of-mine optimization advice. '
So far so very good.
Marty has also 'liked' posts by Erik van Doezum, Head of Global Metals, Mining and Global Steel Lead at ING Bank- (2). ING are leading the move to decarbonise the steel production chain, and they took part in the recent debt funding of H2 Green Steel in Sweden - (3). Marty then 'liked' a post by Matthias Woitok, Head of Structured Finance for N, C and SE Europe at the EIB - who also participated in the funding round for H2GS.
> So Marty has liked posts by employees of the Saudi Mining Ministry, AMC Consultants, ING Global Steel and the EIB. The last 2 on specific work for H2GS in which they raised €6.5bn for the new Swedish high grade and Hydrogen mega project. The Debt:Equity split was 66:33
>> I reckon these 'likes' are representative of those things the company are working on, giving further support of Saudi involvement on the equity/offtake side, and also some potential sources of debt funding.
We shall see, of course.
(1) https://www.amcconsultants.com/
(2) https://www.thebanker.com/Dutch-bank-ING-sets-the-pace-in-decarbonising-steel-1705566687
(3) https://www.h2greensteel.com/latestnews/h2-green-steel-raises-more-than-4-billion-in-debt-financing-for-the-worlds-first-large-scale-green-steel-plant
More money:
SAUDI ARABIA EYES REVIVING MULTIBILLION DOLLAR ARAMCO SHARE SALE
Saudi Arabia is considering plans to revive a follow-on offering in Aramco as soon as February, in a multibillion-dollar deal that’s likely to rank among the biggest share sales in recent years, according to people familiar with the matter.
The Kingdom is working with a group of advisers and is seeking to potentially raise at least 40 billion riyals ($10 billion) from the share sale on the Saudi stock exchange, the people said, asking not to be identified because the information is private.
A successful deal would bring in funds for Crown Prince Mohammed bin Salman’s ambitious push to diversify the economy.
https://english.alarabiya.net/business/energy/2024/01/31/Saudi-Arabia-eyes-reviving-multibillion-dollar-Aramco-share-sale
Zanaga strategics in a nutshell?
China and the state-backed funds from the Middle East with a mandate to diversify from oil and gas do not face. Oil powers Saudi Arabia and United Arab Emirates are among those most able to take risk.