Editor’s Note: MINE News Ore & More is a regular feature of the Mesabi Daily News that focuses on all aspects of the mining and steel industries.
CLEVELAND — Cliffs Natural Resources has already factored both conversion
work at Northshore Mining in Babbitt for direct reduced iron and super flux pellet production at United Taconite into its capital budget expenditures.
“Any capital expenditures for these two projects are already factored into our overall capital budget for this year,” said Patricia Persico, Cliffs’ director of corporate communications, in an email response to the Mesabi Daily News.
In addition, the company is moving on the permitting process.
“We have the air permit for Northshore and we have submitted for permitting necessary for UTAC. This is underway and we are waiting for this to be finalized,” Persico said.
The world’s second largest mining company is making deeper cost cuts and slashing spending after a massive fall in half-year profit revealed last week.
Mining giant Rio Tinto shook the market last week after announcing it was targeting savings of $1 billion this year, an increase of $250 million on its previous goal, because of the tough market conditions.
To achieve such a goal, the company is closely watching every single expense, including those related to safety equipment.
In an interview with Australian Financial Review, the miner’s iron ore boss, Andrew Harding, revealed that Rio is placing safety glasses and gloves in vending machines that require a staff access card for withdrawal.
“There is no restriction on them — it’s safety equipment,” Harding was quoted. “But instead of someone going ‘this is unlimited, what the hell’ kind of thinking, it reminds people that it’s an important item, contributing to cost reductions.”
The plan has reduced safety equipment use between 15 percent and 20 percent at some iron ore operations, Harding noted, while almost halving usage of some items at others. “That saves Rio millions of dollars each year,” the executive said.
The Melbourne-based company is also cutting overtime and pushing out the lifespand of truck equipment.
In the first six months of the year, Rio reported last week underlying earnings of $2.9 billion, down from $5.1 billion over the same period in 2014. This was driven by a 50 percent in underlying earnings from iron ore — the company’s most important division by far.
To give an idea of just how reliant it has become on the fortunes of the steel making material, Rio calculated that every 10 percent movement in iron ore price has a $1 billion impact on Rio’s underlying earnings. The same ratio for copper is only $183 million.
Rio Tinto is also betting on lower energy prices and a further weakening of the Australian and Canadian dollars to help it reduce capital expenditure to $5.5 billion this year and $6 billion in 2016. Previous guidance was for spending of about $7 billion in both years.
Still, the figures represent less than half what Rio was spending as recently as 2012 as it looked to meet a seemingly insatiable demand from China by bringing new projects on stream.
NEW DELHI — India’s top iron ore exporting state of Goa resumed production on Monday after nearly three years and could hit its court-set annual limit of 20 million tons this fiscal year itself, its mines director told Reuters.
Vedanta Ltd, India’s largest private miner, led the resumption with a ceremonial opening at its Codli mine, heralding the return of a once-big exporter just when iron ore prices are inching up after hitting a decade-low in July.
Almost all other miners in Goa should get their licences to restart this fiscal year, which started in April, said Prasanna Acharya, Goa’s director of mines and geology.
The Supreme Court of India banned mining in Goa in 2012 as part of a clampdown on illegal mining, freezing shipments that reached about 50 million tons in 2010-2011
It lifted the ban in April last year but companies had to wait to get environmental and dozens of other clearances from the government.