Post on 04-Apr-2018
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Geography ofsteel raw
materials -policy
implications.
Magnus Ericsson
OECD Workshop on steelmaking raw materialsParis 2011 12 05
REE
drawing:KaiandersSe
mpler.
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World mining for 150 + years
0
10
20
30
40
50
60
70
1850 1870 1890 1910 1930 1950 1970 1990 2010 2030
Europe USA China USSR/CIS Australia/Canada 6 resource rich developing countriesSources: Raw Materials Data, 2011 and Sames.
% of global mining
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Mining:
Society needs metals
Global industry
Iron ore, copper and gold dominates
Cyclical business
Long term industry Current decade positive for miners
Background
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Metals are running out
Mining is not sustainable
China is holding the world to ransom
Myths
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Are metals adepletingresource?
Manganese drawing: Kaianders Sempler.
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Growth of resource base
Source: Crowson.
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Metals arenotrunning out !
Manganese drawing: Kaianders Sempler.
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Vanadium drawing: Kaianders Sempler.
Is miningsustainable?
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Garpenberg - since 13th c.
Courtesy: Boliden.
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Vanadium drawing: Kaianders Sempler.
Mining is for manycountries the onlychance to start
economicdevelopment!
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China
Structure of iron ore mining. Exploration.
Projects and foreign investments.
Conclusions.
Outline
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The role of China Exploration
Foreign Direct Investment
M&A
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Structure of
Chinese ironore mining
Manganese drawing: Kaianders Sempler.
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Global iron ore production
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Source: Raw Materials Data Iron ore, 2011.
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Chinese iron ore imports
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Source: Raw Materials Data Iron ore, 2011.
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Global iron ore grades
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Source: Raw Materials Data Iron ore, 2011.
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Chinese
structure
Manganese drawing: Kaianders Sempler.
Fragmented
corporate structure. Many small mines.
Low grades, under
ground. Vertical integration.
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Chinese
exploration
Nickel drawing: Kaianders Sempler.
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0
2
4
6
8
10
12
14
16
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0
5
10
15
20
25
30
Total world
China
Sources: Total world MEG, China Ministry of Land and Resoruces.
Billion USD
Global exploration 1
Billion RMB
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Chinese exploration 1
14%
27%
59% Central gov
Local gov
Private
Year 2009 total 30.30 billion RMB
Source: MOLAR 2010.
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Chinese exploration 2
34%
14%12%
10%9%
2% 18%1%Coal
Gold
Copper
Iron ore
Pb/Zn
Uranium
Tungsten
Other
Year 2009 total 26.11 billion RMB
Source: MOLAR 2010.
Iron ore 2.55 billion RMB
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Chinese
explorationMajor exploration efforts.
Worlds largestexploration spender.
400 MUSD iron ore 2009.
No great results.
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New
projects
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Chinese overseas mines
061030
0
5
10
15
2025
30
35
40
45
50
1990Year
1995 2000 2005 2011
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Chinese foreign operations
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Source: Raw Materials Data 2011.Source:Ra
w
MaterialsData,2
011.
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Chinese foreign projects
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Source:Ra
wMaterialsData,2
011.
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Iron ore projects Operating mines
Australia 19.3
Peru 7.0
Brazil 1.7
Canada 0.8 28.8 Projects
Australia 65
Peru 10
Sierra Leone 3 78
Total ~ 110 Mt
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Source: Raw Materials Data, 2011.
Chinese projects in Africa
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Chinese projects in AfricaCountry Metal Company Share % Type
Awaso Ghana Baux Bosai Min. 80 Oper.
Simandou Guinea Fe Chinalco 45 ProjectForcariah Guinea Fe China Int. F. 50 ProjectBong Liberia Fe China Union 100 ProjectTonkolili Sierra L. Fe Shandong 25 ProjectAvantuur South Afr. Mn Baosteel 11 Project
Dilokong South Afr. Cr East Asia Met. 85 Oper.Weziswe South Afr. PGM JNMC 45 Project
Baluba Zambia Cu CNMC 72 Oper.
Chambishi Zambia Cu CNMC 85 Oper.
Gwabw/Njali Zambia U JNMC 30 Project
Muliashi Zambia Cu CNMC 72 Oper.
Munali Zambia Cu CNMC 50 Oper.
Lalapnazi Zimbabwe Cr Sinosteel 100 Oper.Source:Raw
MaterialsData,
2011.
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New projects
Foreign expansion slow -not continuous.
Will increase in the future.
Long term serious problem. Control over imports infocus.
Not reach internal goals.
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Chinese M&A
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0
50
100
150
200
250
300
350
400
450
500
0
20
40
60
80
100
120
140
160
Chinese overseas M & A Word Total RMG Metal Price Index (RHS)
Billion USD
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Summary China
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Engine of demand reduced growth pace.Largest mining country
many small, high cost mines.
Largest exploration country since 2010.
Foreign expansion slow, not continuous.
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Policy implications
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Mineral supply long term, serious problem.
But no physical scarcity.
Asessment of Chinas role based on facts.
Window of opportunity for emergingeconomies.
More proper political focus:
R&D; Training; Balance mining/environment. Rare earths not a problem Chinese import
dependency iron ore, copper is!
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Magnus EricssonPO Box 3127
SE-169 03 Solna, Sweden
magnus.ericsson@rmg.se
Tel: +46-8-744 00 65
Fax: +46-8-744 0066
www.rmg.se
Thank you !
REE drawing: Kaianders Sempler.