Iron ore is an indispensable and important raw material for the steel industry, and its high-quality resources are concentrated in the southern Hemisphere. The world's major steel producing countries such as China, Japan, South Korea and other constraints by the lack of resources, iron ore resources investment and development has become a hot topic in the industry. Recently, the global investment in iron ore resources has been a boom again, and the investment destinations are mainly concentrated in Oceania (Australia), Africa and South America, and the investment enterprises are mainly international mining enterprises, Chinese steel enterprises and Indian steel enterprises. With the acceleration of the development and construction of iron ore projects, it is expected that the contradiction between global iron ore supply and demand will be greatly alleviated in the future.

01

Chinese steel companies speed up the layout of overseas equity mines

The low self-sufficiency rate of iron resources is one of the constraints on the development of China's iron and steel industry. In order to effectively change the composition of iron resources and fundamentally supplement the resource shortcomings of the iron and steel industry chain, the China Iron and Steel Association launched the "Iron Resources Development Plan" in 2022 - it is planned that by 2025, domestic mine production, scrap consumption and overseas equity mines will increase by 100 million tons, 0.7 million tons and 100 million tons respectively compared with 2020. It reached 370 million tons, 300 million tons and 220 million tons.

Enterprises represented by China Baowu actively practice the "iron resource development Plan" and develop iron ore resources in Australia, Liberia and Guinea. In 2023, the FMG Iron Bridge Project, the Bomi project in Liberia, and the Liberian Bang mine project participated by WisCO will be put into operation successively. On May 21 this year, China Baowu's participation in the Onslow Iron ore project in Western Australia completed the first batch of iron ore delivery ahead of schedule. The project, with an annual capacity of 35 million tonnes, is 150 kilometres from the port of Ashburton, also known as Ashburton Iron Ore, and is expected to be mined for more than 30 years. The project is being developed by the Hongshan Iron Ore joint venture between China's Baowu and Australia's Mineral Resources, Metal Coal of the United States and South Korea's PoSCO. On June 17, the Xipo project, a joint venture between Rio Tinto Group and China Baowu (54 percent and 46 percent, respectively), delivered its first shipment of iron ore. The project has a designed annual capacity of 25 million tons of iron ore and is expected to be fully operational by March 2025.

In Guinea, China Baowu participated in the Simandou Iron ore project, which is known as the world's largest reserves and highest quality large-scale high-quality open-pit hematite ore, by issuing bonds and holding shares in the north and South two blocks. On June 19, China Baowu and Simandou Win Alliance completed the equity delivery of the Simandou Iron ore project, marking that China Baowu will become the substantial largest shareholder of the Simandou Iron ore project. It is understood that the project infrastructure has been completed 30% to 40%, is expected to be put into operation in 2026, after full operation with an annual production capacity of 120 million tons of high-quality iron ore, will greatly change the global iron ore supply and demand.

With the increase of investment and development of overseas iron ore resources, it is expected that the production capacity target of China's overseas equity iron ore in 2025 is expected to be reached on schedule, which will provide guarantee for the stable supply of iron ore resources.

02

Indian companies are actively investing in iron ore resources

In recent years, India has been one of the world's fastest growing economies and has risen to become the world's second largest steel producer. As the world's most populous country, India's future steel industry development space has become the focus of attention and investment destination of international outstanding steel enterprises, Indian steel enterprises have also expanded steel production capacity, while actively layout overseas mineral resources.

In March, India's JSPL took over the operations of Venezuela's largest iron ore complex, Orinoco Iron Ore, marking the first private takeover of a heavy industry in the South American country in nearly a decade. Orinoco Iron Ore, controlled by state-owned conglomerate Venezuela Guayana, owns five iron ore mines and plants that produce iron ore pellets and compacting blocks, with a combined proven ore capacity of 2.35 billion tons, or 64 percent of Venezuela's total proven iron ore reserves. In June 2024, India's Vedanta Sesa Goa, which is engaged in iron ore exploration, mining and processing, said its Western Lode Company plans to invest $2 billion in Liberia over the next five years to finance its efforts to ramp up iron ore production. The company has three iron mines in western Liberia with about 3 billion tons of iron ore reserves and is expected to produce 30 million tons a year after the expansion.

03

The investment enthusiasm of international mining enterprises has not decreased

In addition to the relevant enterprises in China and India, two steel producing countries actively invest and develop iron ore projects, international mining giants, steel enterprises, energy enterprises, exploration enterprises and investment companies in other countries are also enthusiastic about iron ore resources investment.

The new capacity of mining giants will be released in 2025. The global iron ore supply pattern is largely determined by the supply conditions of the four major mines. In recent years, the four major mines have actively promoted production capacity expansion projects or replacement projects, and the production capacity release will be mainly concentrated in 2025, with an increase of about 128 million tons of new production capacity. Among them, Vale's S11D mining area civil engineering and Capanema project, which are planned to increase production in recent years, will be put into operation in 2025, which is expected to release 38 million tons of capacity. The Cudaideli mine being developed by Rio Tinto is expected to add 7 million tons of capacity in 2024, and the Xipo Iron Mine project, the Rhodes Ridge Project and the Simandou project will release capacity in 2025, totaling 125 million tons. BHP Billiton's South Slope mine is expected to reach full production in June 2024, adding 6.5 million tons of new capacity. The FMG Tieqiao magnetite project has been put into production in May 2023 and is expected to reach full capacity of 22 million tons by mid-August 2025. The Galian Belinga Iron ore project is FMG's first iron ore project outside Australia through its joint venture subsidiary. The first shipment of iron ore was completed and shipped in December 2023, and extensive drilling activities are currently underway to gradually unlock the production potential of the Belinga project.

In addition, in Australia, Australian energy company Kumbrok plans to invest 3.5 billion Australian dollars to develop high-quality magnetite projects in Queensland, Australia. Located in Gladstone, Queensland, the project, in partnership with Australian Iron Ore Development Corporation (CQM), plans to develop Eulogie magnetite for green production using hydrogen. Eulogie magnetite has an estimated reserve of 465 million tons and produces a grade of up to 65% iron powder, which can be used as a raw material for direct reduced iron. The Gladstone Green Iron project is estimated to cost around $3.5 billion and will be used to explore, develop, mine and process Eulogie magnetite, as well as transport the ore to the hydrogen hub at Gladstone. The project is surrounded by well-developed infrastructure with direct access to Central Queensland's abundant renewable energy, 6 km from the National Grid and adjacent to existing and proposed large-scale wind and solar power generation facilities; It is equipped with road, rail and high-voltage power transmission equipment, and the railway line reaches the port of Glaston, providing protection for the export of iron ore.

In South America, Canadian exploration company Max Resource said it plans to buy Brazilian miner Jaguar Mining's Floralia iron ore project. The mine is located 120 kilometers east of the city of Belo Horizonte, Brazil, a total of 4 iron ore ore bodies, the largest ore body is located in the southeast area, close to Vale's iron ore project and steel mills, complete infrastructure. According to exploration, it is estimated that the mine reserves of about 8 million tons to 12 million tons, iron ore grade of 58%, currently not put into production.

Arcelor Mittal Liberia, a major iron ore producer in Liberia, said the company is building an iron ore concentrator in the concession area of Yekepa, Nimba County. The project, worth about $1.7 billion, will be one of the largest concentrators in Africa, and the first phase of the concentrator is expected to be completed in December.

In Angola, the United Arab Emirates' ABU Dhabi International Holding Company (IHC) plans to invest $1 billion to acquire iron mines in Kassala Kitungo and Munenga in Africa. The Kassala Kitungo iron ore project, located in Angola's Kwanza Norte province, is currently under re-evaluation and is estimated to have a capacity of about 217 million tons in the first 10 years.

In Congo, large-scale iron ore projects with a designed annual capacity of 30 million tons are steadily advancing. Africa Congo Zanaga Iron Ore Limited recently announced the updated results of the 2024 feasibility study for its flagship Zanaga Iron Ore project. The results show that the iron ore project has high economic benefits and is conducive to attracting potential investment. Zanaga will develop management plans around the environment, community, water supply, mine waste and other aspects, and plan the layout of the project's hydropower facilities, ports and third-party investments. The project is located in the southwest of the Republic of Congo, the total reserves of mineral resources are about 6.9 billion tons, the estimated total reserves of iron ore is about 2.1 billion tons, the average grade of iron ore is 33.9%, the mine life is about 30 years. In order to reduce costs and risks, the Zanaga iron ore project is developed in a phased manner. The annual capacity of the first stage is 12 million tons, and the annual capacity of the second stage will be expanded by another 18 million tons, and the annual capacity will eventually be 30 million tons.

In Algeria, FERAAL, a subsidiary of the Algerian State Research and Mining Corporation, formed a CMH consortium with three Chinese companies (MCC International, Sinohydropower and Hunan Shengshi Sunshine Technology Co., LTD.) to develop the Gara Djebilet iron ore mine in order to realize the country's desire to eliminate its dependence on iron ore imports. The total reserves of the iron ore deposit exceed 3 billion tons, recoverable reserves of 1.7 billion tons, is expected to be put into operation in 2026, iron ore annual output of about 2 million tons to 3 million tons, follow-up large-scale mining will reach 40 million tons to 50 million tons of annual production targets. In addition, FERAAL, a state-owned steel producer, signed a contract with China Steel to build an iron ore pretreatment plant with an annual capacity of 4 million tons in Garajbilite Iron ore mine, and set up a joint venture with Tosyali, a Turkish company, to build an iron ore processing plant with an annual capacity of 1 million tons in Beshar.

In addition to the above iron ore projects under construction or planned to develop and build, international mining enterprises continue to increase exploration, and some have made significant progress. South Australian Iron ore producer Peak Iron Mines has made significant progress in its drilling work at the Hoxnest magnetite deposit with the discovery of a new deposit of high quality direct iron ore (DSO) with a grade of 69 per cent iron ore. The project contains iron ore reserves estimated at 1.4 billion tons, adjacent to the company's other iron ore project Buzzard direct iron ore, surrounding rail, road and other infrastructure is complete, can direct iron ore export port of Waiala port.