industry supply chain (iron ore)

05-Dec-2011

1

Dr Neil J. Bristow

Presentation at OECD Steelmaking Raw Materials Workshop

Paris, France 5th December 2011

H & W Worldwide

Consulting [email protected] +61240286268

1. Brief Steel Outlook

2. Iron Ore Markets and Drivers

3. Metallurgical Coal and Coke

4. Scrap, Metallics and Direct Reduction

5. Manganese and FerroAlloys

6. Summary and Policy issues H & W Worldwide Consulting

mailto:[email protected]

05-Dec-2011

2

• A year in two parts strong steel output/demand in H1 then weakness in H2 as economy slows

• Major dislocations to raw materials supply due to weather events in Australia and Brazil, strikes Canada

• Markets tight in early 2011, now softer, what happens if 2012 is stronger than predicted?

• Continued moves to change raw materials pricing – push to indices across iron ore and coal

• Emergence of new basins for coal and new iron ore impact more pronounced in 2012-3

H & W Worldwide Consulting

0

500

1000

1500

2000

2500

Mil

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Crude Steep production by Region

China India Asia ex China, India Europe NAFTA South America CIS Middle East

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2010 2011 2012 2013 2014

Millio

n t

on

nes

Steel and pig iron production growth

Crude Steel

Pig Iron

H & W Worldwide Consulting Source: WSA, H&W Worldwide Consulting

05-Dec-2011

3

0

200

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800

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1200

1400

1600

1800

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Pig Iron production by Region

China India

Asia ex China, India Europe

NAFTA South America

CIS Middle East

60

62

64

66

68

70

72

74

Pe

rce

nta

ge

Global BOF Production Share

Rise of

China

Forecast

China’s growth will raise BF/BOF share by ~0.8% in 2012-3, as the majority of the global pig iron increase derives from Chinese growth in BF productivity and expansions relying mainly on imported raw materials.

H & W Worldwide Consulting Source: WSA, H&W Worldwide Consulting

Vast low cost high grade iron ore reserves

No met coal

No scrap/some merchant pig iron

Favour BF/BOF

Vast high grade iron ore reserves

Very limited met coal

No scrap/some sponge iron

Favour BF/BOF

Limited iron ore reserves

Some met coal

No scrap/minor DRI

Favour BF/BOF + EAF

Vast iron ore reserves

Extensive met coal

Scrap/some DRI

Favour BF/BOF + EAF

Low grade iron ore reserves

Large met coal reserves

No Scrap

Favour BF/BOF

SE Asia

China

Russia

India

In addition to China steel growth to 2014 will be driven by other countries, with a majority favouring the BF route relying on imported seaborne coking coal and domestic iron ore.

Brazil


05-Dec-2011

4

Oxygen enrichment

Pulverised Coal Injection

Deadman

Recent Blast Furnace Changes:

– Reline enlargements

– Pulverised coal injection

– Oxygen enrichment of the blast

– Larger working volumes

– Low gangue feed

– Bosh / Hearth cooling

– Computer control / heat & mass

balance models

– Instrumentation advances

The BF has been the King and has seen of many challengers. It will remain the main producer of iron for

steelmaking into the future, no change in near term.


Iron Ore 0-25%

Sinter 50-85%

Pellets 0-100%

Coke 650-290kg

Pulverised coal injection 0-220kg

Natural Gas 0-60kg

Fuel Oil 0-100kg

Lump Ore Coke

• Raw Materials costs ~60-75% of liquid steel costs

• Transportation costs ~ 6-15% of liquid steel costs


05-Dec-2011

5


Key roles of

coke in the BF

1. Energy

2. Source of Carbon

3. Strength

4. Permeability

Molten slag

Gas flow (coke)

Liquid flow

Sintered Ore Coke +

Carbon monoxide

+

Iron oxide

Carbon dioxide

+

Iron

Coke

+

Oxygen

Carbon

dioxide

Molten iron

Carbon

monoxide

Carbon dioxide

+

Coke

Key takeaway no

change in coke

quality

Key roles of

Ferrous materials

in the BF

1. Low RDI

2. Strength

3. Even softening

/melting

4. High reducibility

Molten slag

Gas flow (coke)

Liquid flow

Sintered Ore, lump, pellets Coke +

Fe2O3 + CO

Coke

+

Oxygen

Carbon

dioxide

Molten iron


Carbon

monoxide

Carbon dioxide

+

Coke

Fe2O3 + C

CO2

+

Fe (l)

Key takeaway no

change in ferrous

quality

05-Dec-2011

6

Tumble /Shatter Index

Decrepitation

Reduction Degradation Index

Reducibility

Softening/melting behaviour

ferrous

burden

quality

No change in near term for ferrous burden materials as BF remains core production unit. Increased

productivity, lower fuel and slag rates remain key targets for ironmakers.


Diagram: Techint

Heavy melt Scrap

50 100% Shredded Scrap

0 – 50%

HBI

0 – 40% DR ore

0 – 80%

Some EAF’s have coal/oxy injection

for additional heating

EAF drivers will also remain unchanged, with adjustments to feedstocks as EAF steelmakers seek to

move up the value chain into higher quality flat products, SB’s etc - rising need for DRI, premium scrap


05-Dec-2011

7

Melting rate Resistance to hot oxidising

gases

Carbon content

Size

DRI poor poor average excellent

HBI poor average average excellent

Heavy melting scrap

average average poor poor

Shredded scrap high

density

average/

excellent poor poor excellent

Pig Iron excellent excellent excellent excellent

Liquid Iron excellent N/A excellent liquid

Increasing EAF use is not all bad for the BF, as merchant pig iron makes an excellent part feed for modern

EAF’s as does liquid hot metal, BF linked to EAF’s in the future?


Cost of iron ore and coking coal as percent of global HRC steel price

0%

10%

20%

30%

40%

50%

60%

70%

80%

1970 1975 1980 1985 1990 1995 2000 2005 2010

% o

f ste

el

pri

ce

Iron ore Coking coal

Major raw materials have risen very sharply in price and are now close to record % shares of the cost of steel based on HRC. This is driving steelmakers to seek to use cheaper and more difficult to use

steelmaking raw materials.

H & W Worldwide Consulting Source: Macquarie Research estimates, September 2011

05-Dec-2011

8

• Raw Materials Impurities • Increase fuel rates and lower productivity

• Can cause breakdown of coke, refractory attack

• Lead to recycling in BF and environmental problems

• Make BF slag unusable

• Freight • Increase costs and carbon footprint

• Losses and degradation during transport

• Stockpiles, dusts, environmental issues

• Supply and Quality • Increasing demand seeing moves to new materials from new locations

• Testing and evaluation of “new” raw materials

• Price of raw materials leading steelmakers to experiment with new

materials H & W Worldwide Consulting

Using carbon lean

sources

Smelting reduction

Modern blast furnace 2010

Advanced technologies

Partial reduction with

biomass or H2

Sequestration

Replace fossil carbon Improve efficiency

Development

CO

2 e

mis

sio

n p

er

ton

ne

of

ste

el 100%

80%

40%

60%

20%

0%

0 1 2 3 4 5 6 7

„Learning curve‟

1

2

4

3

Ta

rge

t

Modern blast furnace 2020

1a

5

Renewable carbon and capture


05-Dec-2011

9







• Natural iron ores (or direct shipping ores (DSO) or run-of-mine ores) – ores as extracted from mines and not subjected to any processes of beneficiation other than sizing. • Lump ore – ore consisting of coarse particles, typically with a minimum size

between 6 and 50mm.

• Sintering Fine ore – ore consisting entirely of small particles. Upper size limit usually between 6.3 – 10mm.

• Sized ore – ore prepared to meet specific size limits e.g. 6.3 x 30mm.

• Processed ore – ore physically or chemically (rare) treated to make them more suitable for use. • Concentrates – processed ores in which the iron content has been increased,

size typically 1mm to 0.125mm

• Pellet Feeds – processed fine ores which have been ground and beneficiated, size typically <0.125mm

• Agglomerates – processed ores formed into coherent pieces which are substantially larger than the original particles, normally found as sinter or pellets


05-Dec-2011

10


The iron ore flow to Blast Furnace

Concentrate

Sinter plant

Pellet plant

Sinter

Pellet

Lump

BF

Fines

Pellet Feed

0 – 25%max

0 – 90%max

50 – 85%max

The iron ore flow to the DR Shaft

Concentrate

Pellet plant Pellet

Lump

DR

Pellet

Feed

~5%

~95% Grinding

Major ferrous raw materials flows are customer and region specific, increased variation is likely in the near future as new materials enter the market.

Primary Melt Formation

Granules Segregated Bed

Humidified

Granules

Sinter

Coarsening by

granulation

Charging on

machine

Humidification by

water condensation

Drying and calcination

Solid-solid

reactions Solid-melt

reactions

Cooling and solidification

Ore Mix

Drying

Calcination

Shrinkage/

cracking

Total melt generated

1. 2.

3.

4. 5. 6.

7.

These sub-processes

influence overall

sintering performance. The response of certain

ores can be quite different,

e.g. goethite, magnetite


05-Dec-2011

11

70 92 113 148208 275

326384 444 628

626678

0

200

400

600

800

1000

1200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e

(millio

n to

nn

es)

10

20

30

40

50

60

70

(Ch

ina

% s

ha

re o

f to

tal tr

ad

e)

World ex China China % share (RHS)

China iron ore imports and share of global trade

H & W Worldwide Consulting Source: CISA, China Customs, H&W Worldwide consulting

The rise of China saw seaborne iron ore grow very rapidly . Ex China seaborne iron ore has not reached pre GFC levels and is unlikely to do so in 2012-3.

Chinese iron ore imports are predominantly fines, estimated at ~90% of total figure with pellets ~5%

of the total; the majority being hematite. Magnetite is excepted to increase in the future.

China iron ore imports by source

Fines Lump Pellet Hematite Magnetite

Australia Yes predominant Yes very limited Yes majority very limited

currently will rise

Brazil Yes predominant very limited Yes Yes majority Very limited

India Yes predominant limited very limited Yes majority no

South Africa Yes predominant Yes no yes no

Ukraine Yes majority no Yes minority yes very limited

Canada Small no Yes majority yes very limited

Russia yes no yes yes very limited

Iran yes no no yes no


05-Dec-2011

12

China

Other Developing

Developed

0

100

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600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Mil

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Incremental Seaborne Iron Ore Growth

23

Seaborne Iron Ore

Chinese imports will continue to grow as domestic supplies increase in cost and decline in grade , and as

significant additional supply comes on stream from major producers leading to reduction in domestic supply.

2010

2020


133 134 136 145 153 136 138 157 170 195254

307358 376 388 412 432

41 44 55 52 55 70 92111

148208

275

326

384444

628 626678

54%

34%

24%

60%

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011e

0%

10%

20%

30%

40%

50%

60%

70%

80%

Domestic Iron Ore (62.0% Fe Equiv) Imported Iron Ore Domestic Ore Share Imported Ore Share

Source: CISA, China Customs, H&W Worldwide consulting

Million

Ton

nes

Accurate information on domestic ore is difficult to get due to under reporting, double counting but

domestic production is still rising to meet the need for iron units.


05-Dec-2011

13

Beneficiation Balling High temperature reactions

90% passing 45µm

Magnetite - magnetic properties - in concentrate form - exothermic heating in

pelletising

Hematite - generally more costly - in concentrate form

Hematite – goethite

(Australian)

X – less desirable because

goethite lowers yield and hinders performance.

X – not ideal because

generally sold as coarse sinter fines <6mm

X – remnant goethite causes

spalling during firing & limits productivity (niche feed).

Magnetite concentrate is ideal for pelletising with excellent chemistry, high Fe, low Al and low P, requiring minimal

grinding and exothermic oxidation to hematite during firing (very limited in sintering), both of which lower energy costs.


Local magnetite is increasingly moving to pellet production where its properties are best suited. From use in

sintering, as many new pellet plants are built in China.

Major seaborne supply basin

Major prospective supply basin

Major domestic supply basin

Mid West Lack of infrastructure, costs mid/high logistics uncertain

Pilbara

Large ore bodies, quality declining, no low-hanging fruit, costs rising

Northern Area Carajas large reserves infrastructure - increasing costs

Canada High project development and operating costs, due to arctic conditions, rail, barge and port constraints near term, new areas lack of infrastructure

Significant new supply unlikely before 2012-3, existing infrastructure close to maximum capacity

Southern Area Carajas large reserves infrastructure - increasing costs

Sweden Large magnetite reserves, high cost UG mining

Russia Large magnetite reserves, mid cost largely domestic

Ukraine Large magnetite reserves, low grade, largely domestic

China low grade, costs mid/high land rising

India Large reserves inc low grade, costs low poor infrastructure

West Africa Large reserves high

grade, costs mid?? no infrastructure

South Africa Large reserves high grade, high costs long rail haul

USA Large magnetite reserves, low grade,

Chile Large/medium reserves, mixed grade,

South Australia Lack of infrastructure, costs mid/high potential reserves

NZ Iron sands low grade, costs mid/high impurities

There are vast reserves of iron ore in the world and many major producing areas have very

significant potential for further resource development by exploration.

H & W Worldwide Consulting Source: Macquarie Research, H&W Worldwide Consulting

05-Dec-2011

14

Source: Macquarie Research, company announcements, H&W Worldwide Consulting

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015

mtp

a

Other

Assmang

Consolidated Thompson

Mt Gibson

Atlas

CSN

Anglo American

FMG

BHP Billiton

Rio Tinto

Vale


Seaborne market likely to see significant growth to 2015, with ~65% projected to come from the “Big 3”.

Capacity growth has been far slower than announced – typically ~50% in delays and reduced output.

800

900

1000

1100

1200

1300

1400

1500

1600

1700

1800

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Seaborne Iron Ore Supply Balance

Seaborne Demand (Imports)

Seaborne Supply (Exports)

Seaborne market remains undersupplied until major new expansions in Australia and Brazil come on

stream post 2013-4. Longer term planned expansions are ahead of demand growth.

H & W Worldwide Consulting Source: Macquarie Research, H&W Worldwide Consulting

05-Dec-2011

15

Iron ore Supply Quality

• Chemistry • Overall drift to lower grade in

many countries • Lower Fe,

• Higher SiO2 and Al2O3,

• Higher P and LOI

• Physical Properties • Trends to finer size

• Reduced lump yield

• Lower metallurgical properties of lump

• Increasing ultra-fines – concentrates and pellet feed

• Ore Types • Trends to increased magnetite

• New Australian and West African magnetite

Iron ore Future Demand

• Chemistry • Overall demand for higher

quality ores and sinters • Lower gangue and RDI,

• Higher reducibility,

• Physical Properties • Trends to coarser size

• To granulate more finer ores

• Lump mix – stronger and higher grade less decrepitation

• Increased pellets

• Ore Types • Trends to optimise use

• Magnetite to pellets

• Hematite to sinter


• Chemistry

• Increased BF slag volumes and rising P levels

• Move from lump to sinter/pellets

• Sinter yields challenged, increased RDI lower RI

• Higher silica loads – problems with slag granulation

• Physical Properties

• Increased pressure on sinter plant productivity

• Moves to manage increased ultrafine ores

• HPS sinter, secondary or selective agglomeration, micro pellets

• Rising magnetite – move to pellets as poor sintering

• Deterioration in sintering size – more concentrates poor

granulation


05-Dec-2011

16

• Market dominated by China today and into the future

• Current tight market to remain, strong markets to

~2014

• Major new capacity coming on stream will balance

market – timing important

• Major changes in the future ore supply

• Many deposits to see grade decline

• More magnetite and finer ores

• India exports – decline?

• Chinese domestic production peaks and then declines

• Will lead to significant changes in BF burdening H & W Worldwide Consulting







05-Dec-2011

17

• Simple definition Coking coal and injection coal (PCI)

• Coking coals (coals that enter the coke oven)

• Hard Coking Coal (HCC)

• Semi-hard coking coal

• Semi- soft coking coal

• “Fillers”

• PCI Coals

• Ultra low volatile coals

• Low and mid volatile coals

• High volatile coals and thermal coal

Declining quality, range of

properties and measures

Declining coke replacement

ratio, fixed carbon, energy

Seaborne market definitions are some what regionally specific, especially when it comes to further dividing

up coals into rank and volatile components.


• Increased strength – larger BF‟s

• Higher CSR - higher productivity

• Larger mean size – increased permeability

• Lower ash – reduced fuel rates

• Move to HCC complimented by low ash CC’s

• Strong growth – emergence of India

• CRR rowing importance – coke price/cost rising

• Rapid burn no residual char – clean Deadman

• Low ash, high energy , low P, alkalis

Active Coke Zone/

Dripping Zone Blast

Raceway

Cohesi

ve

Zone

Coke

PCI


05-Dec-2011

18

0

50

100

150

200

250

300

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Seaborne metallurgical demand 2000-2010

HCC SSCC PCI

Seaborne coking coal imports

150

160

170

180

190

200

210

220

230

240

250

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Mil

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s

Total

Total Ex-China

H & W Worldwide Consulting Source: McCloskey, Macquarie Research, H&W Worldwide Consulting

Seaborne metallurgical coal market remains dominated by the HCC portion. PCI demand was curtailed due

to the GFC but is predicted to grow strongly in the future. The GFC saw China become a major coking coal

buyer, particularly of HCC coals.

HCC remains the largest portion of the increase, as expected with new ovens in India and growing HCC imports

into China. Larger BF’s & higher PCI also favour HCC demand.

HCC

SSCC

PCI

0

100

200

300

400

500

600

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

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HCC

SSCC

PCI

0

50

100

150

200

250

300

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

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Coal demand by type Coal demand growth by type

Source : H&W Worldwide Consulting

05-Dec-2011

19

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

mil

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on

ne

s

Seaborne Met Coal Supply

Australia USA Canada Russia Others

Australia 64%

USA 9%

Canada 11%

Russia 3% Others

13%

2010

No major changes in market structure major producers have retained position. USA retained ability to be

“swing” producer, Australian market share steady growth ~54% to 64%.

H & W Worldwide Consulting Source : GTIS, McCloskey, H&W Worldwide Consulting

Australia 56%

USA 23%

Canada 11%

Russia 3%

Indonesia 2%

Other 5%

Source: GTIS, H&W Worldwide Consulting H & W Worldwide Consulting

Australia is the dominant supplier of met coal to the market. The major 3 producers account for around

89% of the total supply, with US at record exports due to demand and Australian floods

Note: Severe floods in Australia has

reduced exports severe in Q1 and Q2

05-Dec-2011

20

Source: Macquarie Research, H&W Worldwide Consulting

Major seaborne supply basin

Major prospective supply basin

Major domestic supply basin

Tavan Tolgoi, Mongolia High political risk, no infrastructure in place, captive to Chinese market

Shanxi, China Dangerous, high-cost mining conditions, costs escalating on regulatory burden and RMB appreciation

Central Kalimantan High political risk, transport logistics uncertain

Bowen Basin Increasing costs, lower quality, no low-hanging fruit

Tete/Moatize Good mining conditions, challenging infrastructure

Appalachia Increasing costs, regulations, declining reserves Western Canada

High project development and operating costs, particularly in northern British Colombia, rail and port constraints near term.

Elga Challenging infrastructure, much delayed project

Kuzbass Large reserves, but very long route to coast and export markets

Very little new supply likely before late 2012, infrastructure close to capacity and recovery from

2011 flood event has been slower than predicted.


2012 will see new coals from Mozambique, Mongolia and Indonesia enter the market, these are different to

traditional coking coals.

Source : GTIS, Australian Customs, H&W Worldwide Consulting H & W Worldwide Consulting

0

20

40

60

80

100

120

140

160

180

2008 2009 2010 2011a

millio

n t

on

nes

Major Met Coal Producers

Australia Canada USA

0

2

4

6

8

10

12

14

millio

n t

on

nes

Australian exports

SSCC HCC

US producers have increased exports in 2011 to make up for Australian losses due to the weather and are

expected to remain in the market as Australia and Canada grow.

05-Dec-2011

21

Source : GTIS, H&W Worldwide Consulting

Chinese met coal imports have declined in 2011 but continue to grow, from Mongolia . Australian

exports declined due to weather and pricing effects – Chinese swing price buyers


-10

0

10

20

30

40

50

Total Australia Mongolia Russia USA Canada Indonesia

mil

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es

China import changes

2008

2009

2010

2011 YTD

Changes

0

50

100

150

200

250

300

350

400

450

500

Mil

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on

ne

s

Seaborne Metallurgical coal exports

Vietnam

Venezuela

USA

South Africa

Russia

Poland

Other

New Zealand

Mozambique

Mongolia

Indonesia

Colombia

China

Canada

Australia

Seaborne market likely to see increase in 2012, subject to weather effects, with demand weak will China re-

enter the market?


05-Dec-2011

22

• Trends for rising ash levels in new mines and some

new basins (Mozambique)

• General drift down in fluidity in number of regions

• New coals have different properties and characteristics

than current seaborne coals

• Vitrinite levels higher in new basins – new blends

• Reduced volumes of ULV PCI coals and rising P levels

• Widening quality range across HCC/SHCC/SCC


• Trends for rising ash will see rising BF slag volumes

• Cokemakers will seek new blends with new coals

• Will high vitrinite levels see greater “carrying capacity”

• Will trends to ULV coals for PCI change to higher VM

coals?

• Search for high carbon, low ash fillers – increased use

of pet coke?

• Now to NG as an injectant or co-injectant for ash and

environmental benefits?


05-Dec-2011

23

0

2

4

6

8

10

12

14

16

18

mil

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n to

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es

Chinese coke exports

China has supplied coke short regions such as Europe and US prior to the GFC. But with high duties and

moves to reduce energy intensive exports it is highly unlikely that will return to high levels of exports.

H & W Worldwide Consulting Source: GTIS

Source : GTIS, H&W Worldwide Consulting

Coke exports illustrate the extremely weak position in 2009, recovery in 2010 has been mixed and might

slowing, but what happens when ROW fully recovers if China limits exports?


0

2

4

6

8

10

12

14

mil

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on

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s

Chinese coke exports

2008

2009

2010

2011

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

mil

lio

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on

ne

s

Chines coke monthly exports

05-Dec-2011

24

• Mature steel industries tend to be coke short

• Europe, US etc

• India has a large merchant coke sector but remains coke short

• China has large (40%) tariffs on coke exports to reduce energy

intensive exports

• Other exporters are Poland, Russia and Ukraine, Australia could

join as it shuts one BF

• Who will replace China when markets return to pre GFC levels of

production if China doe not return to high levels of exports?

• Will new cokemaking technologies (HRCO) see more ovens built

or will another country replace China, e.g. India?








05-Dec-2011

25

0

20

40

60

80

100

120

Mil

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s

Scrap exports

China India Asia ex China, India Europe NAFTA South America CIS Middle East Africa Oceania

0

20

40

60

80

100

120

140

Mil

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n t

on

ne

s

Scrap imports

China India Asia ex China, India

Europe NAFTA South America

CIS Middle East Africa

Oceania

US sees a growth export of scrap, mainly to selected Europe and Asia. CIS has declined as more is

now used domestically.

H & W Worldwide Consulting Source: WSA

400

450

500

550

600

650

700

750

Millio

n t

on

nes

Global Scrap forecast consumption

Rising steel production will see scrap demand increase in both BOF and EAF vessels. DRI will also

play an important part in steelmaking with coal based DRI/HBI likely to join gas based processes.

Source: Midrex, H&W Worldwide Consulting

05-Dec-2011

26

Scrap 86%

Pig Iron 9%

DRI 5%

Overall metallics trade • Scrap the dominant traded metallic

• Most consumed where generated e.g. DRI,

• Rising impurity levels and move to higher quality steel boosting virgin

iron

• Environmental concern remains re

scrap – radioactive sources

• Future increased use internally in

CIS, possibly US

• Scrap pool in China ~2020 for

growing scrap based EAF

• Rise in coal based DRI

With growing demand for metallics will there is a shortage of scrap and increased investment in

alternatives such as DRI and even pig iron, especially in scrap short countries?








05-Dec-2011

27

• ~90% of Mn is used in the steel industry mainly as ferroalloys

• Mn has no substitute thus increased steel demand = more Mn demand

• Mn use in steel had declined to ~2000 but has slightly increased due

to the advent of China

• Mn is also used in stainless steel with high levels in 200 series ~8%

• Most M alloys are HCFeMn and SiMn mainly used in flat and long

products respectively

• Majority of Mn ore is in South Africa, with high grade deposits in

Australia and Gabon

• China has large low grade deposits and needs to import higher grade

ore to make alloys for its strong steel production

• Mn has some environmental concerns and has challenged the industry


Mn ore grade

Mn ore production

Major reserves of Mn ore are in South Africa, although grades are declining. High grade ores have a

more limited life in Australia and Gabon. Problems with infrastructure, power in South Africa and

Government policies have raised questions as to the future of Mn ore growth.


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28

• ~90% of Mn is used in the steel industry mainly as ferroalloys

• Mn has no substitute thus increased steel demand = more Mn demand

• Mn use in steel had declined to ~2000 but has slightly increased due

to the advent of China

• Mn is also used in stainless steel with high levels in 200 series ~8%

• Most M alloys are HCFeMn and SiMn mainly used in flat and long

products respectively

• Majority of Mn ore is in South Africa, with high grade deposits in

Australia and Gabon, current problems in South Africa are a concern

• China has large low grade deposits and needs to import higher grade

ore to make alloys for its strong steel production

• Mn has some environmental concerns and has challenged the industry








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29

• BF will remain the major production route – current RM parameters will remain highly important

• Markets were tight in H1 in due to demand and weather events, now softer , possible recovery in 2012-3 back to tighter markets?

• Drift down to lower grade in many existing mines in Iron ore, Coking coal and Manganese ore

• New steelmaking raw materials will enter the market, finer higher grade ores and high ash and vitrinite coals

• Government policies are changing:

• Australia “leading” the way with MRRT and carbon taxes,

• China seeking to curb energy intensive exports.

• US making mine permitting more difficult

• Governments wanting to share in resources boom, Mongolia coal, copper

• Environmental pressures seeking curbs to mining and land allocation

• Land allocations becoming more difficult across many countries, in Asia,

Africa and Developed world H & W Worldwide Consulting

Thank you for listening

[email protected] +61240286268

H & W Worldwide

Consulting

mailto:[email protected]

industry supply chain (iron ore)

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