Modern Mining August 2024

COMMODITIES OUTLOOK - IRON ORE

Ruling with an iron fist: the world’s most mined metal finds new outlets for growth

Iron ore and its final product, steel, are perhaps the most socially and economically significant commodities of the last three millennia. Now, iron ore is finding new pathways to a green future.

M ark Twain, the American writer and humourist, famously proposed the notion that everything has a limit. “Iron ore cannot be educated into gold”, he remarked. While some limitations can be stretched, there are points beyond which no amount of training, adjusting, modifying or educating can reasonably alter a boundary. Whilst iron ore might not have the luxury reputation of a precious metal, its ability to conform to ever changing global requirements is noteworthy, and, in a sense, refutes Twain’s jocular observation. Iron ore is an essential input for the production of steel, which is the backbone of global infrastructure. According to the United States Geological Survey, 98 per cent iron ore is used in steelmaking, which then feeds the construction, engineering, automotive, and machinery industries. Iron ore dominates the metals mining landscape, comprising 93 per cent of total mined material. In 2022, 2.6 billion tonnes of iron ore were mined, containing approximately 1.6 billion tonnes of iron. Iron ore is subject to the same whims of market demand that influence the performance of every commodity. However, it’s central role in the development of societies lends it a more predicated position; more prosperous societies consume more materials than less prosperous ones, and rapidly urbanising countries, in particular, fuel a high demand for construction materials like steel. Iron ore use is therefore congruent to regional development trends, which is why China and India sit atop the iron ore consumption table. In 1980, the urbanisation rate in China ranged below 20 per cent. By the end of 2023, this rate was higher than 65 percent. Whilst, for China, the steel industry has always been the mainstay of heavy industry, the association between increasing urbanisation and steel consumption only augments this relationship. In 2019, around 725.5 million metric tonnes of finished steel products were consumed in China, and it is generally believed that the peak of steel demand in China hasn’t arrived yet, since urbanisation is still ongoing. Iron ore supply remains a cross-border matter, and demand can rarely be solely fulfilled domestically. Whilst China is the largest producer of iron ore, the iron ore mined in China has a lower iron content, at an average grade of 33 per cent. This means that the highly populous Asian nation is heavily reliant on an imported iron ore supply, mainly from Australia and Brazil. Europe, too, is reliant on steel and, consequently, iron

Electric arc furnaces are used during the production of green steel.

ore, for its development, although its demands are now spurred by slightly different motives. The urbanisation rate in China in 2012 was equivalent to that in Britain in 1900. In line with this, the respective peaks of steel consumption in Britain, France, Belgium and Germany were reached in the 1970s. The demands of the European market have perhaps moved beyond standard large-scale construction and development, with the green energy transition providing the backdrop to new innovations in iron ore and steel use. Industrialisation is the inevitable choice for the modernisation of developing countries, but developed countries that industrialised over a century ago are afforded the privilege of exploring technological advancements. In 2021, the European Union made climate neutrality, the goal of zero net emissions by 2050, legally binding within the bloc. It also

10  MODERN MINING  www.modernminingmagazine.co.za | AUGUST 2024