china, india and the world market balance
TRANSCRIPT
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15th Global iron ore and steel forecast
March 21st 2012 Perth WA
China, India
and theworld market balance
Magnus Ericsson
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l l
nese ore gra es
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ource: aw a er a s a a ron ore, .
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Chinese iron ore imports
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Source: Raw Materials Data Iron ore, 2011.
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Global iron ore demandMt
Total world
3500
4000
2500
3000
na
1500
2000
500
1000
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Source: Raw Materials Data Iron ore, 2011.
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Raw Materials Grou Raw Materials Data, Metals/Coal/Iron Ore
Strategy developmentMining companies, equipment & service
Mineral policy, investment promotion
,
Pre-feasibility/Feasibility studies
, Merged with Intierra to form IntierraRMG
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Outline
India.
China
.
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Indian steel sta esPoint ofPoint of
Peak Point
Saturation
Saturation
Singapore Japan
Point ofInflectionPoint ofInflection
USA
Japan
Chin
TriggerPointTriggerPoint
Singapore
Australia
EU 15
2000-0
IndiaIndia
China
USA
0 100 200 300 400 500 600 700 800
Per capita in KG
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2009 2020 2030
.
Iron ore demand (Mt) 142 175 355ron ore pro uc on
Population (million) 1 210 1 480 1 800
Steel use per capita (kg) 47 74 123
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Sinkin ore rades.
Increase operation scale.
og s cs.
.
Beneficiation of magnetites.
Iron ore exporters vs steel companies.
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China
Exploration
Production Projects
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Billion USD
12
1425
8
10
15
20
Total world
China
2
4
6
5
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0
Sources: Total world MEG, China Ministry of Land and Resoruces.
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Year 2009 total 30.30 billion RMB
Central gov
Local gov
Private
Source: MOLAR 2010.
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Coal
Year 2009 total 26.11 billion RMB
Gold
Copper
Pb/Zn
Uranium
TungstenOther
Source: MOLAR 2010.
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Chinese exploration
.
Worlds largest exploration spender.
400 MUSD iron ore 2009.
o grea resu s.
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Global iron ore production
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Source: Raw Materials Data Iron ore, 2011.
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Chinese structure
ragmen e s ruc ure.
Many small mines.
Low grades, under ground.
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Iron ore production costsType of
mining
Efficient
open pit
Difficult
open pit
Efficient
open pit
Difficult
open pitCosts
- - - -
Type of oreHigh grade
DSOHigh grade
DSOBeneficiation
necessaryBeneficiation
necessaryCosts
(USD/t) 5-12 5-12 15-20 15-20
Total rangeFOB (USD/t) 10-24 15-32 30-56 60-105
Freight toChinaUSD t 20-30 20-30 20-30 20-30
Cost CFRChina 30-55 35-65 50-85 80-135
Source:JacquesAstier,MineralEconomics2011, forthcoming.
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Chinese production volumes
USD/t
Sources: J. Astier RMG.
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Chineseproduction costs
Small mines most < 0.5-1 Mt.
Max total volume
.
Marginal cost of production
>140-150 USD/t Deeper underground.
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Chinese foreign expansion
5 0.1 0.5
World production
Ferro-
Chrome
1048 370 102
Chineseproduction
Planned Chinese
Bauxite
14 0.64 0.27
foreign expansion
Copper
0% 50% 100%
Source: BGR 2007.
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h f
.
sD
ata,
2011
aw
Material
Source:
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Iron ore projects Operating mines
Peru 7.0Brazil 1.7
Canada 0.8 28.8
ProjectsAustralia 65
Peru 10
Total ~ 110 Mt
Source: Raw Materials Data 2011.
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Chinese projects in Africa
Awaso Ghana Baux Bosai Min. 80 Oper.
Simandou Guinea Fe Chinalco 45 Project. .
Bong Liberia Fe China Union 100 ProjectTonkolili Sierra L. Fe Shandong 25 Project
.Dilokong South Afr. Cr East Asia Met. 85 Oper.
Weziswe South Afr. PGM JNMC 45 Projectata,
2011.
.
Chambishi Zambia Cu CNMC 85 Oper.
Gwabw/Njali Zambia U JNMC 30 ProjectM
aterials
Muliashi Zambia Cu CNMC 72 Oper.Munali Zambia Cu CNMC 50 Oper.
Lala nazi Zimbabwe Cr Sinosteel 100 O er. ource:Ra
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Chinese FDI
Foreign expansion slow - notcontinuous.
Will increase in the future.
Long term serious problem
Focus control over imports .
control over imports.
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Largest miner
many small, high costmines.
Engine of demand
Largest explorer since 2010. Poor results.
.
Foreign expansion slow, not continuous. Continued high demand for quality ore.
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rsS
empler.
rawing:Kaiande
Selenium
d
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Chi d I di
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China and India
1600000
1200000
1400000
China
800000
1000000
400 000
600 000
India
0
200 000
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Source: Raw Materials Data Iron ore, 2011.
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Steel: two key questions
Where will China end up? . K r : 74 k /
USA: 203 kg/cap
As China 21 % /year (2000 2007)
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Restrictions in iron ore trade
Exercisedexportduties
,
China:10
%
Argentina:10%
India:statetradingenterprises
:
Source:UniversittBonn
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l Demand outlook still strong.
China, later India will drive demand. .
India reduced exports.
na overseas expans on.
Prices will fall but remain on a high level.
Rare earths not a problem Chinese importde endenc for iron ore and co er is!
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Thank ou !MagnusEricsson
ox
SE169
03
Solna,
Sweden
Tel:
+46
8
744
00
65
Fax:+4687440066
www.rmg.seREE drawing: Kaianders Sempler.
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