How to kill the iron ore price 101.
First, ramp up Pilbara output:
Construction of our Western Range mine is now 80% complete. During the quarter, we finalised commissioning of the autonomous haul trucks and completed the Paraburdoo upgrade works. We continue to focus on construction of the greenfield crushing and screening plant and Paraburdoo plant tie-in, with first ore from that new system on plan for 2025.
• We continue to advance our next tranche of Pilbara mine replacement studies including Hope Downs (Hope Downs 2 and Bedded Hilltop), Brockman 4 (Brockman Syncline 1), Greater Nammuldi and West Angelas projects. During the quarter, funding approval for full execution was obtained for the Hope Downs replacement project and the environmental and heritage approvals are progressing. Project timelines remain subject to timing of approvals and heritage clearances with the Greater Nammuldi project remaining divergent from the original development schedule.
• The Rhodes Ridge pre-feasibility study, which is targeting an initial capacity of up to 40 million tonnes per year, subject to relevant approvals, remains on track to be completed in 2025. First ore is expected by the end of the decade.
Second, ramp up the Pilbara killer:
As we reported in our Second Quarter Operations Review, all conditions for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea were satisfied, with the transaction closing in July.
• The Simfer mine is on track to deliver first production in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year (27 million tonnes per year Rio Tinto share).
• For the Simfer mine, progress continues on plan, despite productivity being impacted by wet weather during the quarter. Mine process plant installation early works and non-process infrastructure contracts were awarded during the period. First blasting activities on our mining concession also took place. The two initial crushers required to produce first ore for commissioning have arrived in Guinea.
• During the third quarter, a number of the critical milestones for 2024 have been achieved for the Simfer infrastructure scope. The laying of sleepers and track has commenced, with progress expected to accelerate next quarter with the arrival of track laying locomotives. For the bridge construction works, we have completed the piers and commenced laying bridge platforms. Tunnel excavation activity is now more than 50% complete and activities at the port have advanced, with transhipment vessel (TSV) wharf construction and car dumper excavation commencing.
• The current total workforce across all the Simfer scope of mine, rail and port is 10,800 with 85% national Guinean participation.
Just as Chinese iron ore demand keeps falling at 2-3% per annum like clockwork delivering the following:
- new iron ore supply of 90mt through 2026
- another 60mt from Simandou through 2027
- demand to fall by 100mt through 2027
250mt iron ore surplus over the next three years and it is already about 70mt.
Then Simandou 2.0.
The iron ore ice age is here.
