Tag Archives: iron

China is determined to build an iron ore hub in Africa as Australia heads for the Quad | Instant News


NEW YORK – There was a time when Japan, like China today, was a revival of power in the East that kept military planners in the West awake at night.

“It is certain that no other country today spends so much of its revenue on naval preparation,” military writer Hector Bywater wrote in the 1921 book “Sea-Power in the Pacific – A Study of the American – The Problem of the Japanese Navy. . “

But Japan has a critical weakness: a shortage of steel.

“Since the end of the Great War, shipbuilding in Japan has been severely hampered by the difficulty of obtaining steel,” Bywater said in his book, which accurately predicted a naval conflict between the Japanese Empire and the United States two decades later.

Japan had imported large quantities of American steel under a special agreement between the two governments before 1917, when the US imposed a steel embargo that stemmed the flow to the Asian country.

“So serious are the recent shortages that tonnage production in Japan during 1920 was 25% less than the estimated 800,000 tonnes made in January of that year,” wrote Bywater. “This steel scarcity reacts to the naval program, delaying the launch and completion of ships.”

The armored cruiser Izumo, the flagship of the Third Fleet of the Imperial Japanese Navy, is seen over Shanghai in 1937. Japan struggles for armor after the US imposed an embargo in 1917. © Getty Images

Chinese state planners eager to learn from history will soon realize that a striking vulnerability for Beijing today is its reliance on iron ore from Australia. While Beijing has tried to pressure and punish Canberra for proposing an international probe into the roots of COVID-19, it cannot escape Australian iron ore, which accounts for more than 60% of China’s imports.

As Australia deepens its ties with the Quad grouping with the US, Japan and India, forming a de facto anti-China tagged team in the Indo-Pacific, Beijing finds it increasingly uncomfortable to rely so much on Canberra for iron ore – the basic ingredient behind its own military build-up. .

But that dependency may turn out very well in 2025, said Peter O’Connor, senior metals and mining analyst at Australian investment firm Shaw and Partners.

“They are very serious” about diversifying supply and flattening the iron ore cost curve, O’Connor told Nikkei Asia.

The main focus for China’s diversification push is Guinea, West Africa’s poorest country, said O’Connor. The 110 km long hills called Simandou are said to hold the world’s largest untapped reserves of high-quality iron ore.

Commodity observers have known Guinea’s potential for years, but a lack of infrastructure has hindered such development efforts. A 650 km long railway will need to be built from scratch, as well as a modern port where iron ore will be shipped.

Cost calculations always discourage potential newcomers, such as Rio Tinto. But Beijing has more incentive to implement the project than simply calculating the return on investment, because China needs to avoid the fate of Japan in the early 20th century.

“Infrastructure is a function of time, money, willingness to invest and, more importantly, capability,” said O’Connor.

China is building railroads around the world through the Belt and Road Initiative and has never been short of experience.

Engineering machinery from China Sany waits to be exported to Guinea at the port in Yantai in eastern China’s Shandong province on March 19. (FeatureChina via AP Images)

But what about the funding?

China currently buys 1 billion to 1.1 billion tonnes of iron ore annually from third parties, O’Connor said.

“For every $ 1 the Chinese can lower the long-term iron ore price … that’s $ 1 per tonne times one billion, so a savings of one billion dollars a year,” he said. “It’s not just about diversity, it’s about lowering prices. It’s not about the return on equity or the return on capital from an actual investment, it’s more about the benefits of a long-term pricing structure.”

The long-term trajectory envisages iron ore prices dropping to around $ 60 an ounce from around $ 160 currently, according to a market view.

The project to develop Simandou has been divided into four blocks, and China has a direct or indirect stake in each of these blocks. The area contains about 2.4 billion tonnes of ore grading more than 65.5%.

“The extraction of Simandou’s iron ore reserves will transform the global market and catapult Guinea into an iron ore export powerhouse with Australia and Brazil,” Lauren Johnston, a researcher at the SOAS China Institute of the University of London, told Nikkei.

If China opens up Simandou reserves and pushes down international iron ore prices, “it could see selective commodity markets increasingly being driven by intra-developing country dynamics,” said Johnston.

China will find such waters easier to navigate than having to do business with members of the Australian Quad.

Guinea is this year’s chair of the United Nations “Group of 77 plus China”, a group of 134 developing countries that make up the large voting bloc that China can count on. Guinea has been actively making statements on behalf of the group since taking office in January.

Johnston predicted that China would be pleased if Simandou’s progress was made ahead of the Forum for Sino-African Cooperation to be held in neighboring Senegal this year, the first time a Beijing-led meeting – held every three years – will be held. by the West African country.

Guinean President Alpha Conde attended the 2018 dinner at the Orsay Museum in Paris. China was quick to congratulate him upon being re-elected in October 2020, despite accusations from the opposition of fraud. © Reuters

As if to reflect Beijing’s determination to complete the project, China was quick to congratulate Guinean President Alpha Conde on his re-election in October, despite allegations of fraud. The election came after Conde changed the constitution, allowing him to run for a third term.

On March 4, the first batch of COVID-19 inoculations donated by China arrived in Conakry, the capital of Guinea, making the country one of the first to receive vaccine aid from China. Foreign Minister Ibrahima Khalil Kaba was at the airport to receive the gift, with Chinese Ambassador Huang Wei by his side.

“I believe that with China’s support, Guinea will definitely overcome the epidemic,” said Kaba, according to the Xinhua News Agency.

The website of the Chinese Embassy in Conakry shows that Huang was a regular visitor to the Kaba office.

“This is no coincidence,” said O’Connor. China is “preparing the way” to develop Simandou, with a rapid 2025 schedule, he said. “It would seem redundant if you were talking about Western producers in Australia or Brazil, but it makes a lot of sense if China can produce within that time frame.”

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ArcelorMittal is looking for partners, subsidies for cleaner steelmaking in Germany | Instant News


(Adding the DRI plant in Bremen in paragraphs 7 and 9)

FRANKFURT (Reuters) – ArcelorMittal is seeking partners and public funding to curb carbon emissions from steelmaking at its German operation where plans for alternative technologies are far ahead, said the head of Europe’s largest steel producer.

European steelmakers are under pressure to reduce carbon emissions while maintaining profitability in a market where there is fierce competition, particularly from China, while pollution permit fees are soaring higher.[L8N2L94CD]

“We are looking for partners from the energy sector to generate renewable energy,” Geert Van Poelvoorde, the new chief executive of ArcelorMittal Europe, told Reuters in an interview.

“We want to replace carbon and increase the use of scrap metal.”

The company estimates it will cost between 1 and 1.5 billion euros ($ 1.18-1.77 billion) to transform the Bremen and Eisenhuettenstadt plants, said Van Poelvoorde.

The company will close blast furnaces at each of the two factories and build electric arc furnaces for scrap smelting.

It will build iron ore direct reduction (DRI) plants in Bremen and Eisenhuettenstadt, which can run on gas as a transition fuel initially, and later on hydrogen, which is considered carbon neutral when it comes from renewable electricity.

The DRI process cuts CO2 versus the integrated blast furnace route by two-thirds.

The Bremen and Eisenhuettenstadt plans “have the potential to save five million tonnes of CO2 per year. That’s important, “said Van Poelvoorde.

Separately, ArcelorMittal’s so-called “smart carbon” will use carbon recycled from bioenergy, green electricity, and carbon capture and use.

Meanwhile in France, the French Finance Minister said during a visit to the Fos-sur-Mer ArcelorMittal plant in southern France that ArcelorMittal is investing 63 million euros to cut the plant’s carbon emissions, which will include a 15 million euro subsidy from the French state.

Van Poelvoorde said the positive results of applying for subsidies of up to 60% of investment at the German and EU levels were critical to Germany’s plans which will be completed possibly early next year and will be implemented between 2025 and 2030.

The EU needs to impose border protection tariffs on imported steel from countries with heavy carbon loads, he said.

Consumers should also be prepared to accept higher steel costs, around 60%, for cleaner manufacturing processes, he said.

($ 1 = 0.8480 euros)

Reporting by Tom Kaeckenhoff, Vera Eckert; additional reporting by Thomas Leigh, editing by Maria Sheahan and Elaine Hardcastle

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High iron ore prices spark mining, protest in Tasmania Australia | Instant News


MELBOURNE (Reuters) – High iron ore prices have paved the way for mining in Australia’s southern state of Tasmania, where the Venture Resources development project is under pressure from conservationists over the potential impact on wilderness areas.

Australia is the world’s largest producer of iron ore, nearly all of it originating from the ancient Pilbara region in the western part of the country.

But strong Chinese demand and Brazil’s supply constraints have pushed iron ore prices to decade highs above $ 175 per tonne this quarter, allowing projects in less conventional areas to become economical.

Venture Minerals expects its Riley project to create more than 100 jobs, and inject about A $ 100 million into the state economy over the life of the mine. The share of base metals explorer has risen more than 50% since early December to A $ 0.058.

The company is on track to deliver its first shipment of the Riley project in the west of the state in the second quarter, after raising A $ 10 million ($ 7.8 million) to build a processing plant and haul roads, according to a presentation Venture Minerals submitted to Australian Stock Exchange on Thursday.

The project, however, has angered conservationists with protesters returning to the area this week, as the Bob Brown Foundation called for the area to be registered as World Heritage.

A Venture Minerals spokesperson said the miners did not anticipate any schedule delays, and that they had all the necessary environmental approvals and planned to rehabilitate the mine after the mine’s two-year life.

Climber Anna Brozek, 23, climbed a 10 meter long pole and remained suspended above the gate, blocking access to the mining site on Thursday before she was arrested, campaigner Scott Jordan told Reuters.

The foundation is concerned that clearing land could increase the risk of wildfires by lowering water levels and because of the threat of haul roads to endangered wildlife including the Tasmanian devil and the tailed quail, Jordan said.

($ 1 = 1.2780 Australian dollars)

Reporting by Melanie Burton, Editing by Sherry Jacob-Phillips

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UPDATE 1-Contractor asked Australia to review asset sale to Tianqi Lithium China | Instant News


(Change date, add timeline, add contractor’s comments)

MELBOURNE March 11 (Reuters) – An Australian mining services contractor locked in a legal dispute with China’s Tianqi Lithium Corp over a failed payment has asked the Foreign Investment Review Agency to examine the related sale, a company director said on Thursday.

Perth-based MSP Engineering has asked the FIRB to review part of the sale of Tianqi’s Australian lithium business to nickel miner IGO after Tianqi refused to pay him to build a battery-grade lithium processing plant in Western Australia.

This week, the Western Australian Supreme Court ruled that Tianqi, one of the world’s largest producers of the lithium chemical used in electric vehicle batteries, must pay A $ 38.9 million ($ 30 million) in arrears. Tianqi said he would appeal.

The FIRB application comes at a time when trade tensions between China and Australia are rising.

“If we are not completed as part of that sale, then we don’t think it represents the right behavior by foreign investors,” director Craig Burton told Reuters.

MSP has had to stop other lines of business from paying its contractors and subcontractors for months of work and has reduced its staff to four out of 400 employees pending payment, he said.

“This has a bad impact on our business. We just want Tianqi to do the right thing and pay the money spent on the project. “

Tianqi said in a filing on Wednesday that it would challenge the verdict that has given up to March 15 to pay money, including principal and interest. His counter claims included that the project was over budget.

The FIRB did not have any comments yet. The IGO declined to comment.

Tianqi’s assets include a 51% stake in the Greenbushes lithium mine and a 100% stake in the Kwinana lithium plant.

The facility was heralded as the largest of its kind before the first phase commissioning of 24,000 tonnes was halted a year ago as Tianqi flagged liquidity problems due to plunging lithium prices.

The debt-laden company in December secured a strategic investor in the form of Australian nickel miner IGO Ltd for 49% of its business, paving the way for a $ 3 billion loan extension.

Tianqi warned that filing the verdict could adversely affect the liquidity and factory of Kwinana.

The facility is likely to start operating in the fourth quarter of 2021, Daiwa Capital Markets said in a January note, citing Tianqi management at a conference.

Tianqi did not immediately respond to a request for comment about the intended launch date.

$ 1 = 1.2932 Australian dollars Report by Tom Daly and Melanie Burton at MELBOURNE; Edited by Mark Potter and Stephen Coates

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Italy’s Eni pledged to be carbon neutral by 2050 in its latest green push | Instant News


MILAN (Reuters) – Italian energy group Eni on Friday stepped up its ambition to reduce greenhouse gas emissions, pledging to become clean carbon neutral by 2050, as it seeks to keep pace with the industry’s pace under pressure from investors to go green.

FILE PHOTO: Italian energy company Eni logo is seen at a gas station in Rome, Italy August 16, 2018. REUTERS / Max Rossi / File Photo

Like his peers, Eni is stepping up plans to transition to cleaner fuels as governments around the world scale up green deals to tackle the climate crisis and power economies.

“We are committed to the full decarbonization of all our products and processes by 2050,” said Chief Executive Claudio Descalzi. “Our plans are concrete, detailed, economically sustainable, and technologically proven.”

Graph: Strategic Presentation of ENI 2021-2024 –

Eni shares were speeding up after the plan was launched, up 2.3% at 1324 GMT versus a flat European oil and gas index.

In an update to the cleanup efforts announced last year, Eni said it would cut absolute emissions by 25% by 2030 from 2018 levels and 65% by 2040.

Eni’s plans come just days after newly appointed Italian Prime Minister Mario Draghi has put climate change at the core of his plans for Italy and said his government intends to increase renewable energy and green hydrogen production.

Eni, which derives most of its revenue from oil and gas, said the goal of decarbonization by 2050 will be achieved by increasing yields from bio refineries, increasing renewable capacity, deforestation initiatives, carbon capture and other green projects.

“These are targets, not aspirations,” Descalzi told analysts during the plan presentation, adding that management salaries would be tied to it.

The world’s top oil and gas companies have set targets for reducing greenhouse gas emissions from their operations and the use of the products they sell.

Royal Dutch Shell pledged to eliminate net carbon emissions by 2050, raising its ambition from its previous target, as its oil production declined from its 2019 peak, while Total changed its brand as part of a push to diversify and grow electricity and renewable energy production.

Eni said he would combine his renewable and retail businesses to grow his customer base in synergy with green ambitions.

Revealing the short-term target until 2024, Eni said production would increase by 4% per year, with upstream spending of around 4.5 billion euros per year.

Eni plans to spend a total of 7 billion euros per year over the next four years, with more than 20% of that allocated to green projects and retail and renewable businesses combined.

Eni said it would once again base its dividend policy on Brent prices, saying a base price of 0.36 euros per share would start from an annual Brent scenario of $ 43 per barrel, two dollars lower than the previous level.

The company will buy back shares for 300 million euros if Brent reaches $ 56 per barrel, and more if the price rises.

Earlier on Friday, Eni posted a better-than-expected net profit adjusted for the fourth quarter as oil prices strengthened after what Descalzi said was “a year unlike any other in the history of the energy industry” sending full-year profits tumbling.

“We will never forget this extraordinary year marked by the most unexpected and disturbing crisis we have ever seen,” said Descalzi.

Graph: Eni vs European Oil and Gas Sector –

Additional reporting by Stefano Bernabei; Edited by Edmund Blair and David Evans

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