SMR feb 2018

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STEEL & TRADE HOW SHOULD IT GO? P 14

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...From the Editorial Desk FEBRUARY 2018 VOL.107. NO.02

C

hina's

Economy The

target is to counter

China, Russia

and other

nations that have bombarded the worldwide markets with cheap

American steel industry to If put into effect, the tariffs would increase the cost of aluminum steel, grinding automakers, beverage makers and other businesses goods and made it tougher for the

compete. and

that purchase lots of these substances.

Skillings Mining Review publishes comprehensive information on global mining, iron ore markets and critical industry issues via our monthly magazine, weekly E-newsletter, annual mining directory and real time website.

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That would raise costs for customers, kill some tasks in those sectors or both. The tariffs will most likely provoke a reply from America's trading partners rather than only China and Russia, since they'd use to every other nation. What concerns many economists is that the possibility that the retaliation will proceed even farther.

A stream of increasingly unpleasant tariffs would slam the brakes on international expansion. This is one way that the dispute may worsen: By provoking answers from Canada and Mexico, the tariffs could hamper the current renegotiation of the North American Free Trade Agreement. Mr. Trump will pull America from the arrangement, which could erect new and damaging trade barriers on agricultural exports in states like Iowa. The W.T.O. could announce that the tariffs violated international trading rules, but the Trump government, that has marginalized the company, could opt to ignore it. Such a movement would stir havoc in the world trading regime.

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February 2018 SKILLINGS MINING REVIEW | 3

IN THIS ISSUE

GLOBAL IRON ORE EXPLORATION & MINING PROJECTS P 06

STEEL & TRADE HOW SHOULD IT GO? P 14

P 17

COMPUTER GAMES IMPROVE SAFETY: U.S. MINE WORKERS

COMMENTARY

IRON RANGE REGION

COMMENTARY...........................................................03

Mining Industry Rise with a Little Help.....................10

COVERSTORY

Vale(d) Promise to Re-open Mine.............................13

Global Iron Ore Exploration &

MINING LAW

Mining Projects..........................................................06

Mineral Leasing Interest Picks Up ...........................05

IRON ORE

Polymet Permits Process Continues .......................12

ERP Ships Iron Ore.....................................................09

MINING SAFETY

Surface Mining popular method

Computer games improve safety: U.S. mine workers..... 17

of mining: 2018..........................................................16

STEEL

Iron Ore Prices Rise....................................................19

Steel & Trade How should it Go?...............................14

Epa's "Reversal Of Fortunes".....................................20

Metso Steel Excellence and More.............................18

Statistics.............................................................. 22/23

4 | SKILLINGS MINING REVIEW February 2018

Mining People............................................................ 21

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MINING LAW

Mineral Leasing Interest Picks Up

C

hippewa Capital Partners and Tom Clarke controls a large amount of surface rights in

Nashwauk Minnesota, but no mineral

rights are hoping to have the state mineral leases reinstated upon meeting

Minnesota G overnor M ark D ayton and the Department of Natural Resources.

certain conditions set by

Expecting more activity in 2018, Cliffs Chairman, President and CEO Lourenco Goncalves emphasized their Project Mustang, which began operating in May of 2017. Cliffs also secured all $700 million they need for their first hot-briquetted iron (HBI) plant planned

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for Toledo. The project means the plant can produce more DR grade pellets.

Some will feed the HBI plant, and

some will go to customers. Across the country, mineral lease battles are continuing.

February 2018 SKILLINGS MINING REVIEW | 5

COVERSTORY

Global Iron Ore

Exploration & Mining Projects Balla Balla Infrastructure Group’s $5.6 billion integrated iron ore project in the Pilbara is on track for development after the Western Australia government validated the state agreement signed earlier this year.

B

BIG

plans to construct a

new iron ore export facility

on the Pilbara coast between Karratha and Port Hedland, with a 162km railway linking it to iron ore deposits in the central Pilbara. The project is expected to create 3300 construction jobs and 910 operational positions.

The Railway (BBI Rail Aus) Agreement 2017 bill ratifies the state agreement signed between the state and the project proponents earlier this year, which provides tenure for the railway component of the project and outlines local industry participation, community development and third party access requirements. BBIG Chair

Jon Young said the company welcomed the support that the BBI Project and its state agreement received in Western Australia.

The Indian State government is exploring various options to procure iron ore for the proposed Bayyaram steel plant which is being set up with the support of the Central government, according to Minister for Mines and Geology K T Rama Rao. Minister Rao said the iron ore availability at Bayyaram does not meet the required quality and the State government was planning to procure iron ore from Biladila in Chhattisgarh. The Geological Survey of India (GSI) report

6 | SKILLINGS MINING REVIEW February 2018

on iron ore at Bayyaram is not promising since it doesn’t meet the minimum quality percentage. Rao said the State government was also planning to lay a special railway line from Biladila to Bayyaram to facilitate transport of quality iron ore.

Alternatively, the State can also go for the modern way of slurry pipe to get raw material to the plant. The government has released Rs 2 crore to chalk out a feasibility report, which will be available by the first quarter of this year.

Union Minister for Steel Chaudhary Birender Singh has tasked KIOCL (earlier Kudremukh Iron Ore Ltd.,) with exploring iron ore and gold in South India, in Tiruppur of Tamil Nadu and Mysuru of Karnataka, respectively. It is in line with the government’s decision to diversify and expand KIOCL’s activities across the country and not just within Karnataka as a part of Steel

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Policy 2017. Mr. Birender Singh said that the government has recognised KIOCL as a mineral exploration entity under the MMDR Act, 1957 to undertake mineral exploration across India.

The company would explore iron ore in 100 sq km area of Tiruppur and 200 sq km of area in Mysuru districts. In line with the government’s thrust on utilisation of pellets as a raw material in blast furnace and sponge iron industry, KIOCL can contribute immensely in the field.

KIOCL has entered into a Memorandum of Understanding (MoU) with Vishakhapatnam- based Rashtriya Ispat Nigam Ltd., (RINL), also known as

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Vizag Steel, a public sector undertaking.

KIOCL will set up a 1.2 million tonne per annum capacity pellet plant at RINL to meet latter\\u2019s requirement while surplus would be sold to others.

Similar joint ventures would be established with other steel plants. KIOCL posted a profit of Rs. 18.27 core after tax in 2016-17 by producing 1.7 million tonnes of pellets that found buyers from China, Malaysia, Vietnam, South Korea and Japan. It also sold 7.3 lakh tonnes of pellets domestically.

KIOCL’s pellet plant Panambur would be modernised at a cost of after tax 200 crore to aid the government\\u2019s plan to produce 300 million tonnes of steel by 2030 according to Singh.

Chinese consortium is comprised of leading infrastructure and machinery companies including China Railway Group, China Communications Construction Company and Dalian Huarui Heavy Industry Group has signed a memorandum of understanding (MoU) with the Brazil state of Bahia and Bahia Minera, a Brazilian subsidiary of Eurasian Resources Group, to develop a $2.4bn integrated mining and logistics project in Brazil.

The project includes Bamin’s Pedra de Ferro iron-ore mine, the Porto Sul deep-water port and the associated Fiol railway, which will link the landlocked state of Tocantins to the coast of Bahia.

The MOU sets out the intention of the

February 2018 SKILLINGS MINING REVIEW | 7

COVERSTORY

consortium to jointly participate with Bamin in the ownership and development of the integrated mine, rail and port project and to arrange its financing. The Pedra de Ferro mine will develop high grade, large-scale iron ore reserves located near the city of Caetit, in Bahia. Once operational, the Pedra de Ferro mine will supply up to 20mt of high quality iron ore to global markets annually. Porto Sul will be a deep-water port located north of the city. It will be capable of handling up to capesize vessels and will be the export point for Bamin’s iron ore.

China also has plans to explore iron ore in Peru. Zhongrong Xinda Group's Jinzhao Mining , traditionally a copper, zinc and precious metals miner, is closer to becoming a regional force in the iron ore industry as Chinese mining companies ramp up investment.

The unit plans to start construction at its’ USD 2.5 billion Pampa de Pongo iron ore project in the second quarter of this year.

At last report, the company aims to finish work on a feasibility study for the 21,200ha property in Arequipa region before securing final permits from the energy and mines ministry. The project, which has 3.4 billion tonne in reserves, is designed to produce 22.5 million tonne per year and is scheduled to start operating in the third quarter of 2019, involves USD 1.3 billion in mine development and USD 1.2 billion in plant construction. The mining project will also feature a desalination plant and a slurry pipeline to the port of Marcona.

Africa has to spend $360 billion on infrastructure by 2040, according to the African Development Bank (AfDB).

Alderon Iron Ore Corp. updates the independent Economic Impact Assessment of the Kamistiatusset Iron Ore Project, located in the Labrador Trough, Canada’s premier iron ore district.

The EIA outlines significant economic benefits and positive implications for the economies of Newfoundland and Labrador, Quebec and Canada. The Kami Project is expected to create more than 100,600 full-time equivalent jobs across Canada, resulting in $7.6 billion in incomes to workers and businesses.

In addition, Kami is expected to generate $5.1 billion in total revenue for federal and provincial treasuries and $19.5 billion in GDP over a 26-year period, including two years of construction activities. The Kami Project’s economic impacts were analyzed for

8 | SKILLINGS MINING REVIEW February 2018

the economies of Newfoundland and Labrador, Quebec, Ontario, the other Provinces of Canada. Chairman and CEO of Alderon Mark Morabito stated China’s bid to reduce harmful emissions is driving an increase in domestic steel mills switching to high-grade iron ore products with fewer impurities, stated.

For the type of iron ore concentrate that the Kami Project will produce (in the order of 65% Fe), there is already a significant spread to the normal Platts 62% iron ore index price, that, on September 1, 2017, was pegged at US$23.50 per tonne; this spread has widened over the last 18 months and prices for high-grade ore are expected to continue to increase as environmental regulation becomes more stringent. The high-grade, low deleterious element iron ore that will be produced

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at Kami is the perfect composition to be blended with Pilbara iron ore and will fetch a premium price because of its quality.

resources, Martin Donohue, state at recent convention last year that chinese organizations were making deals with lithium companies to secure lithium deliver. "it is very hard to find a lithium developer or manufacturer that hasn't signed some type of an off-take with the chinese converters, or even in addition upstream," he said.

Iron ore heavyweight Fortescue Metals organization is seeking out lithium inside the widespread Pilbara location of Western Australia, in reaction to the strengthening outlook for lithium and electric powered cars worldwide. Requested if Fortescue's interest in lithium was driven by the strengthening outlook for lithium and electric powered cars, Fortescue's chief executive said: "Yeah, in reality." In the meantime, the managing director of Australian lithium agency Kidman

Fortescue's interest in lithium comes as worldwide demand for electric vehicles continues to grow, and countries signal tougher rules on the use of petrol and diesel vehicles. The lithium sector has also been a favourite for investors this year, with lithium company Galaxy Resources, more than

doubling in price since the middle of June of 2017.

Fortescue also likes copper, due to the fact as economies develop, copper is one of those ubiquitous metals that is needed in developing economies, and the extra electric wires you put in houses and motors and planes and anything, then it really is going to grow the call for for copper.�

And globally, copper grades are falling, so there may be less deliver of copper than the call for projection.

Fortescue could check capability lithium initiatives using the equal approach as with different commodities.

ERP Ships Iron Ore

T

he new version of the bankrupt

M a g n et a t i o n

operations shipped three trainloads of iron ore to customers , including concentrate from near

Grand Rapids to a Mexican steel mill and other concentrate that was shipped from the company's

Reynolds, Ind., pellet

plant.

It's good news for Tom Clarke, ERP owner, and his efforts because it's the first revenue for the company after sending millions of dollars to revive the operations. It will be mid-summer or later before ERP's pellet plant in Indiana is refurbished to comply with federal air-pollution rules. Clarke hopes to have the Grand Rapids-area mining and concentrating operations up and running this summer, ready to ship ore to Indiana.

Pellets made in Indiana will go to make pig iron in Lorain, Ohio, in a deal with Republic Steel, Clarke has said. Clarke, who made his first millions in health care, also owns eight coal mines in the U.S. and Canada.

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February 2018 SKILLINGS MINING REVIEW | 9

IRON RANGE REGION

Mining Industry Rise with a Little Help

T

U.S. C ommerce S ecretary Wilbur Ross -- that owes a o

lot of his private wealth to

purchasing

U.S.

steel manufacturers

and selling them there is no production problem that can not be solved with alloy tariffs.

Contrary to Ross in his prior profession, The Trump Organization Inc.'s investments in hotels and office systems imply it is a consumer, instead of

producer of the metal. That should provide Trump pause prior to taking actions to boost the price base of their family enterprise. To see why suggested tariffs on U.S. steel imports are such bad news to the nation's manufacturing industry, consider how creation has developed in the last several decades.

After falling throughout the 2008 financial catastrophe, output from America's mills never entirely recov-

10 | SKILLINGS MINING REVIEW February 2018

ered -- consistent with improvements in Europe and Japan.

The natural reaction to lower demand would be to reduce capacity too. But almost uniquely among leading steel manufacturers, the U.S. never did this.

The European Union trimmed roughly 14.1 million tons over precisely the identical period. Because of this, while Europe's steel capability usage has edged up recently, America's has

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languished in the sub-80 percent amounts where creating a gain becomes a battle.

Ross has tended to place the blame for this on the international steel trade, specifically China -- as Gadfly has claimed before, the U.S. is not a huge consumer of steel out of Asia's biggest market, which hardly makes it to the listing of top 10 import resources. The solution stems from looking not in steel manufacturers, but its own consumers.

Analysts typically initially inspect the transaction in crude steel to determine that nations are importers and that can be exporters -- but that is a skewed approach to examine the circumstance.

After all, if Subaru Corp. purchases a lot of steel out of JFE Holdings Inc. because of its Japanese factories and turns it into automobiles available at the U.S., the steel manufacturing and consumption is occurring in Japan but the alloy is finally used on the side of the Pacific.

In attempting to assist America's metal producers, Ross dangers dealing a setback to the much larger car and machinery businesses that rely in their own raw materials. If Trump will tackle this issue in a pragmatic and systematic manner, he would be wise to reflect on that actuality.

Turkey's manufacturing in January 2017 has been 2.95 million tons, the report revealed. International total crude steel production, comprising 64 nations, was 139.44 million tons from January, up 0.8 percent in 138.27 million tons from January 2017, a report from the institution stated on Feb. 26.

Its manufacturing dropped 0.9 percent in January compared with the exact same month this past year.

One of EU nations, Germany had the greatest crude steel production at 3.7 million tons. The crude steel capability utilization ratio of nations in January has been 70 percent, down 0.2 percentage points from January 2017.

Nearly every significant steelmaking country produces more steel than it utilizes domestically since they are exporting and manufacturing steel-intensive goods in larger quantities than they are importing them.

The U.S. is unique in demonstrating the reverse pattern: its own trade deficit is not in coils and pubs, but at the vehicles, machines and building products which are created from such primitive substances. This helps explain why stocks in Ford Motor Co., General Motors Co. and Caterpillar Inc. dipped after Ross summarized his tariff alternatives, while the ones of Nucor Corp. and U.S. Steel Corp. jumped.

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February 2018 SKILLINGS MINING REVIEW | 11

MINING LAW

Polymet Permits Process Continues

T

he

P oly M et

contested case

hearings are widely employed for complicated state license

problems, like pipelines, power lines and power plants, but are also allowed for mining problems.

The request, which has been anticipated, asks for certain adjustments to PolyMet’s draft permit to mine or, even when the DNR does not require the modifications, a contested case hearing procedure.

Duluth for Water is utilizing Mount Polley as a scare tactic in northeast Minnesota to PolyMet's strategies compared. It's the identical old strategy the anti-mining groups are using since the beginning concerning aluminum nickel mining in northeast Minnesota.

The PolyMet dam will be built on top of a dam which has been around in the former LTV mining website for 50-plus decades. New containment walls moving down to bedrock is going to be built to comprise seepage, which consequently will return in the basin.

The co-lead bureaus were deliberate and comprehensive in their own scientific, independent inspection, which provided numerous opportunities for public participation, and which got the Maximum grade given from the U.S. EPA to get a mining project of the Type, The PolyMet dam will be built on top of a dam which has been around in the former LTV mining website for 50-plus decades. New containment

12 | SKILLINGS MINING REVIEW February 2018

walls moving down to bedrock is going to be built to comprise seepage, which consequently will return in the basin.

The incline on LTVs basin is only going to be 13%, in which Mount Polley was 77 percent. This provides PolyMet a more secure platform, also it's intended to take care of a 20-inch catastrophic rain event. This layout is sound and may include the discharge in the mine.

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Vale(d) Promise to Re-open Mine

V

ale says the

Coleman Mine

is

expected to return to production in mid -F ebruary , after

being close down last year for vital restoration.

The organisation stated

the maintenance might be finished by early

2018.

The union representing the people stated in December the repairs would continue until the end of January.

Now, a spokesperson with the business enterprise stated, based on recent inspections, the mine might not re-open in mid-February. "A few mainte-

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nance personnel have been recalled to help the restore work to the shaft, " Danica Pagnutti with the corporation stated, "so that it will mitigate impacts to our people at Coleman, who have been temporarily laid off, we have recalled and transferred more than 200 production and renovation

personnel to quickly work at Coleman and other sites." For personnel with no work due lack of availability, the employer is adding on EI advantages via a supplemental unemployment plan to make certain the shaft is secure enough to operate and so that we can have Coleman Mine back to production.

February 2018 SKILLINGS MINING REVIEW | 13

STEEL

— Steel & Trade —

How should it Go?

T

hat is not commerce wars g e n e r a l ly g o . reason why.

Here's the The possibility of

a trade war may damage the financial growth underway.

That is because any

heavily determined. The amount of employees who will lose out if nations are cut off from America far surpasses the amount that stand to profit in the impending tariffs.

doubt can prompt organizations to curtail investment or hold off hiring.

Past tariffs, their resources include shooting tactical strikes at particular businesses or carrying their grievances into the World Trade Organization. Any activities threaten the worldwide supply chains where the American market is

Many analysts say that the reverse: that the possibility of a trade war will damage economic growth. If put into effect, the tariffs would increase the cost of aluminum and steel, including automakers, drink makers and other businesses that purchase lots of these substances. That would raise costs

14 | SKILLINGS MINING REVIEW February 2018

for customers, kill some tasks in these businesses or both.

Raw steel production in the USA stays higher than it had been 25 decades back, but it's down considerably in the 1970s.

Even though Mr. Trump's stance is very likely to offer him a rise in industrial states like Ohio and Pennsylvania, that were equally crucial to his 2016 success, a trade war could damage other production strongholds which

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are home to his base voters. In an age of globalization, the conversation of retaliation might be more powerful than the true action.

has marginalized the company, could opt to ignore it. Such a movement would stir havoc in the world trading regime.

will most likely provoke a reply from America's trading partners rather than only China and Russia, since they'd apply to another nation.

Industries that purchase aluminum and steel, and of course agricultural exporters, use many times more people than the businesses that the president would like to protect.

It'd be just like ejecting the referee out of a playoff basketball match. A free-for-all may ensue, together with nations levying tariffs or subsidizing domestic exporters in manners the W.T.O. would not let.

The conservative Wall Street Journal editorial board known as the tariffs the largest policy blunder of the presidency.

(Canada didn't take its struggle with the U.S. But it surely does not help matters, Curtis explained, and may make discussions far more awkward and tense.

Aluminum and steel tariffs ought to be worrisome for businesses and investors alike, however, the major issue that everybody has in their heads now is what exactly does this imply for NAFTA?

That reduction would cost the nation 190,000 jobs. What concerns many economists is that the possibility that the retaliation will proceed even farther.

The W.T.O. could announce that the tariffs violated international trading rules, but the Trump government, that

A bicycle of increasingly unpleasant tariffs would slam the brakes on international expansion. The tariffs

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Canadian foreign minister Chrystia Freeland, who's a part of their negotiating group, '' said sternly, these tariffs have been "absolutely unacceptable" and that Canada is ready to "take operational steps to protect its own trade interests and employees.

February 2018 SKILLINGS MINING REVIEW | 15

MINING TECHNOLOGY

S

Surface Mining popular method of mining: 2018

Mining Equipment market forecasted to grow at CAGR of 3.24 percent from 2017-2021.

The Surface Mining Equipment Market urface

report provides actionable intelligence on factors that have been driving requirement ; key trends which are impacting the market ; challenges which affect the marketplace dynamics alongside the market size, a

SWOT analysis of the critical sellers, and various sections.

Base Metals Mining Equipment Market Report 2018 presents a comprehensive assessment of the Base Metals Mining Equipment including empowering technology, key trends, market drivers, challenges, standardization, regulatory arena, deployment models, operator case studies, opportunities, potential roadmap, value chain, ecosystem player profiles and approaches.

The report also presents forecasts for Base Metals Mining Equipment investments from 2018. It provides a comprehensive summary of the current market, its dynamics, construction, characteristics, main players, expansion and need drivers, etc..

The objective of the report is to describe the condition of the global Base Metals Mining Equipment market, to present actual and retrospective information regarding the volumes, dynamics, structure and characteristics of production, imports, exports and consumption and to create a prediction for the marketplace in the following five decades.

Additionally, the report presents an elaborate analysis of the main market participants, cost changes, growth and

demand drivers of the market and all other elements, influencing its growth.

Surface mining is a popular method of mining and can be practiced worldwide because of its benefits over underground mining. Major advantages of surface mining comprise: Can recover around 100

16 | SKILLINGS MINING REVIEW February 2018

percent of the mining resources within mining excavation, and more economical than underground mining.

In a nutshell, the report provides the essential positions to assess the worldwide market for Surface Mining Equipment.

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Computer games improve safety: U.S. mine workers The Future of Gaming"Researchers in the University of Arizona Mel and Enid Zuckerman College of Public Health and the UA Lowell Institute for Mineral Resources received a $1.6M national grant to create more effective training techniques, such as using computer games, to improve safety among U.S. mine workers.

T

he

Resource Training Center

provides timely and appropriate mining community-specific

and environments that allow them to make decisions and see the outcome of their actions.

information, resources and methods that increase the ability and efficacy of exposure measurement , security training and direction for miners.

Falling within the realm of games people who have applications aside from entertainment the simulations will be made to replicate a more real-life mining atmosphere. Considerable games provide an opportunity to set mine workers in dynamic circumstances

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The three-year grant is funded by the National Institute for Occupational Safety and Health (NIOSH). The UA team is a pioneer in the use of acute games which mimic coaching exercises for mining businesses.

Before this year, the UA licensed an interactive training plan developed at the Lowell Institute for Mineral Resources to Tucson-based startup firm

Desert Saber. For the NIOSH study, the UA research team is partnering with McCraren Compliance, a Tucson-based company that offers mining and other occupational training security solutions, the workplace of the Arizona State Mine Inspector, recipients of the Mine Safety and Health Administration grant and other local and national mining companies and trainers to create a national network to share best security practices.

U.S. mine employees sit through many hours of safety training each year but the training is not always as successful as it needs to be.

Serious games allow a coach to use the effectiveness of on-the-job training while not exposing the newest miner to bodily harm.

February 2018 SKILLINGS MINING REVIEW | 17

STEEL

METSO Steel Excellence and More

F

inland-based minerals processing specialist

Metso

has published

its yearly report for

2017. The

business describes its balance sheet as strong , with headline figures including a

9%

year earnings to

there was a definite upward trend in all our client industries. Metso experienced considerable growth in orders for its industry-leading metal recycling solutions during 2017.

increase in year-on-

2.7 billion (US$3.3

billion) and a comparable growth in orders received to just under

3 billion

($3.7 billion).

To be better equipped to execute on our profitable growth strategy, the company implemented an organisational change during the second half of this year.

Metso is in a fantastic position both financially and in terms of organisational ability to capitalise on the positive market environment. In 2017,

The orders further expand Metso's installed base worldwide, including major orders for China and Europe.

Several orders were delivered in Asia-Pacific along with the United States.

Profitability has not yet recovered, because of challenges confronted in mining jobs and in ramping up action levels near the end of the year in the professional services business of their minerals segment. Throughout the 2017, the global metal recycling market began to recover after the protracted

18 | SKILLINGS MINING REVIEW February 2018

downturn, and customers are starting to invest to boost process productivity and efficiency.

Metso clients range from large, multinational scrap yards and major players from the steel industry, to local, familyrun metal waste scrap processors.

The total worth of the orders and client names aren't being disclosed.

The deliveries cover the entire metal recycling product portfolio, including shears, balers and shredders.

A huge part of the orders were crap shears, ranging from the little and mid-sized N-series(TM) shears, to the heavy duty EtaCut(TM) scrap shears, which are designed particularly for scrapyards, steelworks and foundries.

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Iron Ore Prices Rise Iron ore investors have been tracking China's bid to resist pollution by cutting off factories output, a drive that's buoyed costs of higher-quality ores that are more efficient and aided miners including Rio Tinto Group and Vale SA.

a bleaker scenario perform,the slump could be worse. Iron ore may even come to be the very best short if important liquidity tightening measures kick, or if end-user steel demand is proved to be substantially poorer than anticipated.

But Vale said that its grade advantage, the efficiency of S11D along with other factors had eroded the Australian miners' profit advantage in terms of earnings before interest, taxation, depreciation and amortisation (EBITDA) on each tonne of iron ore sold to China.

"By 2016 onwards, Vale maintained the exact same degree of EBITDA per tonne because its Australian peers, regardless of the structural freight disadvantage and the bunker oil price evolution in the period.

T

hat means mills in the world's biggest supplier may be producing less steel as demand picks up.

The

Tangshan could signal China's industrial heating season.

prospective purchase in

additional restrictions to northern production outside of the

Even though the curbs lower output of this metal, damaging overall demand for iron ore they raise steel prices and boost mills margins, enabling them to afford more costly inputs including iron ore. There was a mixed message from Citigroup Inc., which stated that while costs might keep on increasing to $80 in the long run, losses may follow.

Underneath its foundation case, prices will drop to the $60s at the second, fourth and third quarters. And should

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February 2018 SKILLINGS MINING REVIEW | 19

IRON ORE

Epa's "Reversal Of Fortunes"

U

.S. Environmental Protection A gency (EPA) A dministra tor Scott Pruitt is following

process denial and allow the Pebble mine proponents to proceed. The Army Corps of Engineers on January 5, 2018 received a mining permit application from Pebble.

through on his promise to restore the rule of law and process to the previ-

Obama Administration’s action to restrict mining in Bristol Bay, Alaska. ous

Reversing its previous position, the Environmental Protection Agency announced that it will withdraw for now its plan to cancel the Obama Administration's proposals to restrict mining in the Bristal Bay fisheries area in Southwest Alaska. In 2014, the Obama Administration issued what

was widely considered a preemptive veto of the Pebble Limited Partnership mining project. This effectively brought the mine’s application and due process to a halt. In May of 2017, Pruitt took the first step to rescind this due

NORTH AMERICAN MARKET (LTU) Company

IRON ORE PRICE REPORT

Ore Type

Pellets, FOB Michigan Mines Pellets, FOB Cleveland-Cliffs Inc. Minnesota Upper Lakes Port Source: CLEVELAND-CLIFFS INC. Cleveland-Cliffs Inc.

20 | SKILLINGS MINING REVIEW February 2018

The Pebble Project is located approximately 200 miles southwest of Anchorage in the Bristol Bay region. The area around Pebble was secured by the State of Alaska during the Cook Inlet Land Exchange of 1974 - a three-way land swap involving the federal government, the State and the Cook Inlet Region Inc. (CIRI), an Alaska Native regional corporation.

Per Iron Unit

Per Gross Ton at 64%

Per Ton at 64% Reporting Date

$1.28

$81.92

12/31/17

$1.42

$90.88

12/31/17

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MINING INDUSTRY PEOPLE

ADVERTISING INDEX

Comstock Mining Inc., a Nevada-based, gold and silver mining company, announced the election of Leo M. Drozdoff, 52, to its Board of Directors and the retirement of Robert A. Reseigh, after 9 years of service, from its Board of Directors. Mr. Reseigh will remain involved with the Company as a member of a newly established Mining Advisory Committee, to assist in all aspects of technical mining and mine development, along with Mr. Drozdoff and Mr. Dan Kappes.

Azcon..........................................20 Barr Engineering.........................11 Corem..........................................19 Global Minerals Engineering.....20 Golder Associates......................22

Energy Fuels Inc. announced that, following the recent appointment of Mark S. Chalmers as President and Chief Executive Officer, the Company has made certain changes to its management team. Mr. David C. Frydenlund, the Company’s previous Senior Vice President, General Counsel and Corporate Secretary, has been appointed Chief Financial Officer, General Counsel and Corporate Secretary effective as of March 2, 2018. Mr. Frydenlund will replace the Company’s current CFO, Daniel G. Zang, who

Hallett Dock Company...............05 Lake Superior Chapter ISEE.......20 L & S Electric Inc........................13

will be leaving the Company on March 1, 2018.

Malton Electric Company..........21

Robert Friedland, Executive Chairman and founder of Ivanhoe Mines, and Lars-Eric

walcot water...............................09

Johansson, Chief Executive Officer, announced the strengthening of the company’s senior management team with the appointment of Egizio Bianchini as Ivanhoe’s Executive Vice Chairman. Mr. Bianchini’s appointment with Ivanhoe Mines will be effective March 12, 2018. He also will join Ivanhoe’s board of directors as the company continues with the development of its three tier-one mining projects in Southern Africa: Kamoa-Kakula, Kipushi and Platreef. 

Mielke Electric Works.................17 Naylor Pipe.................................24 NBC.............................................20 Neo Solutions.............................21 Northern Engine & Supply.........21

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February 2018 SKILLINGS MINING REVIEW | 21

STATISTICS

December 2017 Crude Steel Production

By John Edward, Associate Publisher

W

1,691.2 million (Mt) for the year 2017, up by 5.3% compared to 2016.

Crude steel production increased in all regions in 2017 except in the CIS, which has remained stable (subject to current estimates).

from 49.0% in 2016 to 49.2% in 2017.

Japan produced 104.7 Mt in 2017, down by -0.1% compared to 2016. India’s crude steel production for 2017 was 101.4 Mt, up by 6.2% on 2016. South Korea produced 71.1 Mt of crude steel in 2017, an increase of 3.7% compared to 2016.

Annual production for Asia was 1,162.5 Mt of crude steel in 2017, an increase of 5.4% compared to 2016. China’s crude steel production in 2017 reached 831.7 Mt, up by 5.7% on 2016. China’s share of world crude steel production increased

In 2017, the EU (28) produced 168.7 Mt of crude steel, an increase of 4.1% compared to 2016. Italy produced 24.0 Mt in 2017, up by 2.9% on 2016. Spain produced 14.5 Mt of crude steel in 2017, an increase of 6.2% compared to 2016.

orld crude steel production reached tonnes

Crude steel production in North America was 116.0 Mt, 4.8% higher than in 2016.

The US produced 81.6 Mt of crude steel, up by 4.0% on 2016. worldsteel’s estimation of 2017 crude steel production in the CIS based on available data was 102.1 Mt, the same amount as in 2016.

Russia* produced 71.3 Mt of crude steel in 2017, up by 1.3% on 2016. Ukraine* recorded a decrease of -6.4% with a year-end figure of 22.7 Mt. Annual crude steel production for South America was 43.7 Mt in 2017, an increase of 8.7% on 2016. Brazil produced 34.4 Mt in 2017, up by 9.9% compared to 2016.

Statistics based on World Steel Association Report released on January 24, 2017.

Preliminary USGS Iron Ore Statistics for August 2017

By John Edward, Associate Publisher

A

U.S. G eological S urvey (USGS) report by Mineral Commodity Specialist Christopher A. Tuck, U.S. mine production and shipments of iron ore in August 2017 were 3.81 million metric tons (Mt) and 5.21 Mt, respectively (fig. 1, table 1). Average daily production of iron ore was 123,000 metric tons (t), 10% less than that ccording to the

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of July and 23% greater than that of August 2016.

Average daily shipments of iron ore were 169,000 t, slightly less than those in July and 22% greater than those in August 2016. Mine stocks at the end of August 2017 were 15% less than those held at the end of July 2017 and 8% less than those held at the end of August 2016.

U.S. exports of iron ore totaled 1.56 Mt in August 2017, 66% greater than those in July 2017 and 57% greater than

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those in August 2016. U.S. imports of iron ore totaled 434,000 t in August 2017, 6% less those in July and 13% greater than those in August 2016. 

22 | SKILLINGS MINING REVIEW February 2018

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CRUDE STEEL PRODUCTION, DECEMBER 2017. Source – World Steel Association % CHANGE NOV – 17/16

NOV 2017

OCT 2017

OCT 2017

NOV 2017

1,220 e

1,315 e

1,004

21.5

Total - European Union (28)

13,633

13,983

12,883

5.8

Cuba

25 e

20 e

21

20.8

Total - Other Europe

3,578

3,388

3,110

15.1

El Salvador

10 e

10 e

8

22.1

Total - C.I.S. (6)

8,695

8,585

8,793

-1.1

Guatemala

25e

25 e

25

-1.4

Total (66 countries)

138,059 136,280 132,869

3.9

1,690 e

1,600 e

1,510

11.9

0

0

0

…

United States

6,760

6,709

6,475

4.4

e – estimate | r – revised Monthly Crude Steel Production in the 67 Countries included in the report, in thousands of metric tons. The 67 countries included in this table accounted for approximately 99% of total world crude steel production in 2016.

Total - North America

9,730

9,679

9,044

7.6

U.S. RAW STEEL PRODUCTION

381

434

313

21.8

Brazil

2,822

3,030

2,368

19.2

Chile

105 e

95 e

91

15.2

Colombia

105 e

105 e

97

7.8

Ecuador

50 e

45 e

48

4.1

Paraguay

4e

5e

3

105 e

100 e

5e

Canada

Mexico Trinidad and Tobago

COUNTRY

Weekly Production Capability Utilization Rate

Production

February 10, 2017

1,737

- 0.6

74.5

10,006

2.1

73.3

40.4

Previous Year

1,770

- 1.9

75.9

10,217

-

75.2

102

2.8

February 3, 2017

1,747

1.6

75.0

8,269

5e

5

-4.3

2.1

73.0

40 e

15 e

78

-48.5

Previous Year

1,751

- 0.2

75.1

8,447

-

74.6

Total - South America

3,617

3,834

3,105

16.5

January 27, 2017

1,719

1.5

73.8

6,522

2.6

72.5

Egypt

605 e

586

536

12.9

Previous Year

1,736

- 1.0

74.5

6,697

-

74.5

Libya

52

51

50

2.6

January 20, 2017

1,693

- 0.8

72.6

4,803

3.2

72.1

-

-

-

-

Previous Year

1,736

- 2.5

74.5

4,960

-

74.5

South Africa

503 e

551 e

416

20.9

Total - Africa

1,160

1,187

1,003

15.7

Iran

1,980

1,952

1,521

30.2

216

190

216

0.0

Saudi Arabia (HADEED only)

285 e

269

445

-35.9

Total - Middle East

2,767

2,698

2,507

10.4

China

67,047

66,151

65,860

1.8

India

8,796

8,350 e

8,385

4.9

Japan

8,719

8,702

8,714

0.1

South Korea

6,124

5,650 e

5860

Taiwan, China

1,960 e

1,900 e

Total - Asia

94,346

Peru Uruguay Venezuela

Morocco

Qatar

Australia New Zealand Total - Oceania

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WEEK ENDING

Percent Change*

Percent Change*

Year-to-Date Production

Production

Argentina

NOV 2017

% CHANGE NOV – 17/16

NOV 2017

COUNTRY

In thousands of Net Tons – Source - American Iron and Steel Institute * Percent Change is a comparison between a given week and the previous week.

The % change figure in the previous year row refers to the change from a given week compared with the corresponding week of the previous year.

AISI’s estimates are based on reports from companies representing about 50% of the Industry’s Raw Steel Capability and include revisions for previous months.

WEEKLY U.S. RAW STEEL PRODUCTION BY DISTRICT DISTRICT

WEEK ENDING 2/10

2/3

1/27

1/20

North East

219

211

215

213

4.5

Great Lakes

637

653

650

648

1,932

1.5

Midwest

167

162

159

160

92,388

91,912

2.6

Southern

641

646

629

599

472

482

448

5.3

Western

73

75

66

73

61

55

64

-5.4

Total

1,737

1,747

1,719

1,693

532

538

512

4.0

In thousands of Net Tons – Source – American Iron & Steel Institute.

February 2018 SKILLINGS MINING REVIEW | 23