Last year, iron ore shipments accounted for about 5% of the country’s gross domestic product. Rio, BHP Group Ltd and Fortescue Metals Group Ltd produce almost two-thirds of the world’s seaborne iron ore from Western Australia, and margins remain enviable. While there’s some growth in smaller segments like manufacturing of electric cars and air conditioners, the economy is no longer building at breakneck speed, meaning the nation’s iron ore imports are forecast to decline. Among the most favoured prospective solutions is to combine a renewables-powered electric furnace with direct reduced iron (DRI), a material produced by deploying natural gas to remove oxygen from premium ores. But Australia’s typical iron ore has a grade of between 56% and 62%, making it largely unsuitable for DRI production – or only with additional processing that could add as much as 25% to costs, according to Wood Mackenzie Ltd. — Bloomberg

Source: The Star October 30, 2023 05:21 UTC