Geography of steel raw materials - policy implications.

Transcription

1 REE drawing: Kaianders Sempler. OECD Workshop on steelmaking raw materials Paris Geography of steel raw materials - policy implications. Magnus Ericsson

2 World mining for years % of global mining Europe USA China USSR/CIS Australia/Canada 6 resource rich developing countries Sources: Raw Materials Data, 2011 and Sames.

3 Background Mining: Society needs metals Global industry Iron ore, copper and gold dominates Cyclical business Long term industry Current decade positive for miners

4 Myths Metals are running out Mining is not sustainable China is holding the world to ransom

5 Are metals a depleting resource? Manganese drawing: Kaianders Sempler.

6 Growth of resource base Source: Crowson.

7 Metals are not running out! Manganese drawing: Kaianders Sempler.

8 Is mining sustainable? Vanadium drawing: Kaianders Sempler.

9 Garpenberg - since 13th c. Courtesy: Boliden.

10 Mining is for many countries the only chance to start economic development! Vanadium drawing: Kaianders Sempler.

11 Outline China Structure of iron ore mining. Exploration. Projects and foreign investments. Conclusions.

12 The role of China Exploration Foreign Direct Investment M&A

13 Structure of Chinese iron ore mining Manganese drawing: Kaianders Sempler Anton Löf

14 Global iron ore production Source: Raw Materials Data Iron ore, Anton Löf

15 Chinese iron ore imports Source: Raw Materials Data Iron ore, Anton Löf

16 Global iron ore grades Source: Raw Materials Data Iron ore, Anton Löf

17 Chinese structure Manganese drawing: Kaianders Sempler. Fragmented corporate structure. Many small mines. Low grades, under ground. Vertical integration Anton Löf

18 Chinese exploration Nickel drawing: Kaianders Sempler Anton Löf

19 Global exploration 1 16 Billion USD 30 Billion RMB Total world China Sources: Total world MEG, China Ministry of Land and Resoruces.

20 Chinese exploration 1 Year 2009 total billion RMB 59% Central gov 14% Local gov Private 27% Source: MOLAR 2010.

21 Chinese exploration 2 Year 2009 total billion RMB Iron ore 2.55 billion RMB 10% 12% 9% 2% 1% 18% 14% Source: MOLAR % Coal Gold Copper Iron ore Pb/Zn Uranium Tungsten Other

22 Chinese exploration Major exploration efforts. World s largest exploration spender. 400 MUSD iron ore No great results Anton Löf

23 New projects Anton Löf

24 Chinese overseas mines Year

25 Source: Raw Materials Data, Chinese foreign operations Source: Raw Materials Data Anton Löf

26 Source: Raw Materials Data, Chinese foreign projects Anton Löf

27 Iron ore projects Operating mines Australia 19.3 Peru 7.0 Brazil 1.7 Canada Projects Australia 65 Peru 10 Sierra Leone 3 78 Total ~ 110 Mt Source: Raw Materials Data, Anton Löf

28 Source: Raw Materials Data, Chinese projects in Africa Country Metal Company Share % Type Awaso Ghana Baux Bosai Min. 80 Oper. Simandou Guinea Fe Chinalco 45 Project Forécariah Guinea Fe China Int. F. 50 Project Bong Liberia Fe China Union 100 Project Tonkolili Sierra L. Fe Shandong 25 Project Avantuur 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.

29 New projects Foreign expansion slow - not continuous. Will increase in the future. Long term serious problem. Control over imports in focus. Not reach internal goals Anton Löf

30 Chinese M&A Billion USD Chinese overseas M & A Word Total RMG Metal Price Index (RHS) Anton Löf

31 Summary China Engine of demand reduced growth pace. Largest mining country many small, high cost mines. Largest exploration country since Foreign expansion slow, not continuous Anton Löf

32 Policy implications Mineral supply long term, serious problem. But no physical scarcity. Asessment of China s role based on facts. Window of opportunity for emerging economies. More proper political focus: R&D; Training; Balance mining/environment. Rare earths not a problem Chinese import dependency iron ore, copper is! Anton Löf

33 Thank you! Magnus Ericsson PO Box 3127 SE Solna, Sweden Tel: Fax: REE drawing: Kaianders Sempler.