Africa's iron ore revolution edges nearer

 Africa is currently the source of just 4-5% of the world's iron ore production but possesses reserves substantially in excess of that proportion. Major projects such as Simandou in Guinea are regularly referred to as the next Pilbara — the iron ore-rich region of Western Australia that has been the backbone of the country's economic success.

The continent's vast deposits can enable it to play a much bigger role in this market and numerous projects are now edging closer to production. Mauritania, Guinea, Sierra Leone, Liberia, Cameroon, Republic of Congo, Gabon and Nigeria are all potential hot spots for the growing trade. China imports around 80m tonnes of iron ore a month, more than two thirds of which comes from Australia and Brazil. At present, China sources some 8% of its iron ore from Africa. Seaborne iron ore exports are forecast to grow around 10% to 1.3bn tonnes this year, with volumes growing around 100m tonnes this year and next-- over 900m tonnes of this ore will be bought by China.

However, with China currently enduring its slowest growth in a quarter of a decade, prices have fallen. Last year prices averaged around $135 per tonne. They are currently at $95 per tonne, up from a low of $90, having fallen below $100 since 19th May. Nevertheless, the first four months of the year saw China import 305m tonnes, up 21% on last year. Chinese steel demand grew about 7-8% last year as its cities continue to grow, even as the economy as a whole increases at a reduced rate.

- See more at: ABM


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