Australia is the undisputed king of iron ore thanks to hematite iron ore, better known as direct shipping ore (DSO). The problem is that Australian and global reserves of high-grade DSO are fast approaching depletion.
This week, Senior Corporate Finance Associate, Jack Colreavy CFA explores what the future holds for iron ore exports, particularly in Australia.
Australia is the undisputed king of Iron Ore. There's no argument around that. We are by far the world's largest exporter. And to put it into context, Australia exported 342 billion, that's in US dollars, worth of goods in 2021. And Iron Ore comprised 117 billion or 34 percent of it. So it's a critical mineral.
The problem is that most of the iron ore comes from hematite reserves, which are starting to deplete and exhaust themselves. So where does the future come from? And the answer is magnetite Iron Ore. Now, while magnetite has a much lower grade naturally, it possesses different properties, which enable it to be processed into a much higher grade product, which possesses a lot less impurities.
Now the steel smelters love this because they then use less Coal and therefore there are less emissions when they're producing the steel from the magnetite Iron Ore. So really the future of Iron Ore is in this green Iron Ore that is magnetite.
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Barclay Pearce Capital acknowledges the Traditional Owners of the land where we work and live, the Gadigal of the Eora Nation and pays our respects to Elders past, present and to the children of today who are the Elders of the future. We celebrate the stories, culture and traditions of Aboriginal and Torres Strait Islander Elders of all communities who also work and live on this land.
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Barclay Pearce Capital Management Pty Ltd ACN 619 189 847 | AFSL: 503261
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Barclay Pearce Capital | ACN: 671 103 254
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© 2024 Barclay Pearce Capital - BPC | All Rights Reserved
Disclaimer:
Barclay Pearce Capital Management Pty Ltd is the holder of an Australian Financial Services Licence (Number: 503261). The information provided on this website is general in nature only and does not constitute personal advice. The information has been prepared without taking into account you or your company’s objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. You should seek independent financial advice and read the relevant disclosure statements or other offer documents prior to making an investment decision about a financial product. The material contained on the website is for information purposes only and should not be construed as an offer or solicitation or recommendation to buy or sell financial products.
Barclay Pearce Capital acknowledges the Traditional Owners of the land where we work and live, the Gadigal of the Eora Nation and pays our respects to Elders past, present and to the children of today who are the Elders of the future. We celebrate the stories, culture and traditions of Aboriginal and Torres Strait Islander Elders of all communities who also work and live on this land.