A glance at some ASX iron ore stocks

Highlights:

• Australia is the world's largest producer of iron ore
• Some of the major iron ore mining companies listed on ASX are BHP Group, Fortescue Metals Group, RIO Tinto, Mineral Resources, Champion Iron, and Deterra Royalties
• Rio Tinto and Wright Prospecting updated their joint venture agreement in October 2022
• Champion Iron reported record production in the second quarter of FY23

Iron ores are the rocks and minerals from which metallic iron can be extracted economically. Iron ore is found in sedimentary rocks. Global iron ore production in 2021 was estimated at around 2,537 million tonnes. Australia was the largest producer and accounted for approximately 35% of the total production. It was followed by Brazil and China. These three countries produced nearly 65% of the total iron ore production in 2021.

The world’s total iron reserves are estimated at 179 billion tonnes. Australia’s iron ore reserves are nearly 29% of the world's reserves.

Combined shipments of iron ore in the June 2022 quarter from Australia, Brazil, South Africa, and China accounted for more than 80% of the sea route supply globally. The total Australian iron ore exports are estimated to be 882 million tonnes in 2022 and 959 million tonnes by 2024.

Some of the major iron ore mining companies listed on the ASX (Australian Stock Exchange) are BHP Group Ltd. (ASX:BHP), Fortescue Metals Group Ltd. (ASX:FMG), RIO Tinto Ltd. (ASX:RIO), Mineral Resources Ltd. (ASX:MIN), Champion Iron Ltd. (ASX:CIA), and Deterra Royalties Ltd. (DRR). All these companies have a market capitalisation greater than AU$1 billion individually.

By the end of November 2022, spot prices of iron ore remained steady at US$93 per tonne. The rising COVID-19 cases in China can offset the economic stimulus provided earlier.

Based on the current iron ore market and recent announcements, let’s have a look at recent developments at some ASX iron ore stocks:

Data Source: ASX as on 02 December 2022

Fortescue Metals Group Ltd. (ASX:FMG)

Fortescue Metals Group, a West Australian mining company, is among the world’s low-cost iron ore producers. It is shipping at an annual rate of greater than 180 million tonnes. The company has three mining sites in Pilbara, Western Australia.

Fortescue released the operating performance of the first quarter of FY23 in October 2022. The total iron shipments in the first quarter were 47.5 million tonnes. It also entered into a collaboration with Tree Energy Solutions to enhance the development of green hydrogen in Germany.

Fortescue signed the Exploration Convention for the Belinga Iron Ore Project with the Gabon government through its joint venture with Ivindo Iron SA in August 2022. It is among the world’s largest underdeveloped deposit of high-grade hematite.

RIO Tinto Ltd. (ASX:RIO)

Rio Tinto is a global mining group operating in 35 countries through mines, smelters, refineries, data centres, etc. It has four products: copper, iron ore, aluminium and minerals. The company is operating 17 iron ore mines, a rail network and four port terminals in Western Australia.

Rio Tinto and Wright Prospecting Pty Ltd. updated their joint venture agreement in October 2022 for the development of the Rhodes Ridges Project in the East Pilbara. The site contains 5.8 billion tonnes of high-grade mineral resources with an average grade of 62.3% iron.

Rio announced its plan to invest AU$600 million in renewable energy assets in the Pilbara region to decarbonise iron-ore operations. The funds will be used to construct two 100MW solar power facilities and 200MWh on-grid battery storage in Pilbara by 2026.

Image Source: © Lucidwaters | Megapixl.com  

Champion Iron Ltd. (ASX:CIA)

Champion Iron owns and operates the Bloom Lake Mining Complex via its subsidiary, Quebec Iron Ore Inc. It also has exploration projects in Labrador Trough and the Consolidated Fire Lake North iron ore. The company sells its iron ore concentrate to global customers like Europe, India, China, the Middle East, Japan, South Korea, and Canada.

Champion announced its half-yearly report and account information in October 2022. There was record production of 2.9 million wet metric tonnes of high-grade 66.1% Fe concentrate in the second quarter of the year. It was driven by the commissioning of Phase II concentrator of its Bloom Lake project.

The results of feasibility study increased the nameplate capacity of 15 Mtpa towards producing 69% Fe Direct Reduction (DR) pellet feed.

The Kami Project’s feasibility study is likley to be concluded by the first half of next year.