Leading iron ore companies in Australia and Brazil are working to increase output, and last year Brazil’s Vale (NYSE:VALE) produced a record 349 million tonnes of iron ore — above its own guidance, according to Reuters. The lift in India’s mining ban has also played an integral role in increasing iron ore output.
Prices for iron ore are also on the rise. Market Realist notes that prices finished 2016 up 80 percent, and averaged $58.50 per tonne for the year. Unsurprisingly, Chinese demand was instrumental in pushing prices up. In 2017, iron ore prices have continued to rise, reaching $92.23 per tonne on February 13. That’s the highest level since August 2014.
With that in mind, it’s interesting to look at the 10 top iron ore-producing countries in 2016. Here’s an overview of those countries, with data provided by the US Geological Survey (USGS).
1. Australia
Mine production: Useable ore: 825 MT; iron content: 491 MT
First on the list is Australia, whose useable iron ore output was 825 MT in 2016. That’s a higher number than was seen in 2015, and the increase was no doubt helped by Australia’s leading iron ore producer, BHP Billiton.
The company reported record production for the second half of 2016 at its Jimblebar mine. More specifically, it put out 136 million tonnes of iron ore in the last half of the year — a 6-percent increase from the previous year.
2. Brazil
Mine production: Useable ore: 391 MT; iron content: 254 MT
Useable iron ore production in Brazil totaled 391 MT in 2016. As mentioned, Vale achieved record production, with 349 million tonnes of iron ore produced. Bloomberg notes that 2016 was the second year in a row that the company reached a production record.
Moving forward, Vale plans to shift its focus from production in Minas Gerais state to higher-grade deposits in the north of the country. The shift is an attempt to bring down costs.
3. China
Mine production: Useable ore: 353 MT; iron content: 219 MT
China is the world’s largest consumer of iron ore, despite being only the third-biggest producer of the material last year.
The country’s iron ore purchases reached an all-time high in 2016, recording an annual rise of 7.5 percent and passing 1 billion tonnes. According to Market Realist, the increase was the result of two things: strong steel demand, and domestic iron ore replacing imports from Australia and Brazil.
4. India
Mine production: Useable ore: 160 MT; iron content: 98 MT
Iron ore production in India has turned a new page since mining bans were lifted. However, the country is now a less significant supplier to China than it once was. Historically, it supplied up to 10 percent of China’s iron ore, but in 2016 it accounted for only 1.5 percent of China’s total iron ore imports.
Iron ore production in India is expected to grow by 185 million tonnes over the next four years, with average annual growth of 6.9 percent projected from 2017 to 2021.
5. Russia
Mine production: Useable ore: 100 MT; iron content: 60 MT
Iron ore production in Russia is trending upward, and its mining and steel group, Metallionvest, reported higher output of the material last year. In total it put out 25.2 million tons of iron ore, up 5.9 percent from 2015.
6. Ukraine
Mine production: Useable ore: 58 MT; iron content: 35 MT
In 2016, useable iron ore production in Ukraine was 58 MT. Iron ore companies in the country are currently producing less than they have in the past because Alchevsk Steel Works has halted the smelting of cast iron.
7. South Africa
Mine production: Useable ore: 60 MT; iron content: 38 MT
Kumba Iron Ore (JSE:KIO) is Africa’s largest iron ore producer. In 2015, the company produced 44.9 MT of iron ore; its output dropped slightly in 2016 to reach 41.5 MT.
8. Canada
Mine production: Useable ore: 48 MT; iron content: 29 MT
Production in Canada totaled 48 MT of useable iron ore in 2016.
Champion Iron (TSX:CIA) is one company pursuing iron ore production in the country. It is focusing on developing iron ore resources in Quebec, and in 2016, it acquired the Bloom Lake mine. The completion of a feasibility study was announced on February 16, 2017; it shows that the mine has the potential to be competitive in the global iron ore market.
9. United States
Mine production: Useable ore: 41 MT; iron content: 26 MT
According to the USGS, iron ore production in the US dropped in 2016 due to a decrease in steel produced from oxygen furnaces. Overall, US steel production fell to 78.9 MT in 2015 from 88.2 MT in 2014. Steel production rose to 80 MT in 2016.
Furthermore, last year six iron ore mines in the US were either idled, closed permanently or had their output reduced. The USGS notes that one open-pit mine in Minnesota remained “indefinitely idled” as of November 2016, with no plans for reopening. In Michigan, an open-pit mine was permanently shut down at the end of August 2016.
10. Iran
Mine production: Useable ore: 26 MT; iron content: 11 MT
Closing out the list is Iran. As the Financial Tribune notes, the country exported 15.15 million tons of granulated iron ore during the 10 months ended January 19, 2017; that’s up 50 percent from the previous year. The country is hoping to export between 20 and 25 million tons of steel by 2025.