Mineral Economics, project evaluation (광물 경제학, 프로젝트 평가)

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호주 UNSW Mining School 석사과정 Coursework을 통과한 과제입니다.

목차

SUMMARY i

1 INTRODUCTION 1

2 IRON ORE 2
2.1 Use of iron ore 2
2.2 Types & price premium of iron ore 2
2.2.1 Fines 2
2.2.2 Lumpy ore 3
2.2.3 Pellets 3

3 IRON ORE MARKET 4
3.1 Supply 4
3.2 Demand 5
3.3 Importance of infrastructure 5

4 PRICE DETERMINATION MECHANISM 6
4.1 Types of iron ore price 6
4.2 Iron ore price settlement 6

5 LONG TERM OUTLOOK FOR SUPPLY/DEMAND 7
5.1 Chinese domestic steel demand forecast 7
5.2 Global pig iron production forecast 7
5.3 Seaborne iron ore supply/demand and price forecast 8

6 PARTICIPATION OF STEEL MILLS IN IRON ORE DEVELOPMENT PROJECTS 10

7 CONCLUSIONS 11

8 REFERENCES 12

본문내용

Iron ore is the basic ingredient mainly for steel making. It can be classified into three types as fines, lumpy ore and pellets which have different patterns of consumption in steel making processes. Iron ore market is oligopoly and kind of supply-oriented market as the volume of top 3 suppliers’ exports account for approximately 66% of global seaborne trade while top 10 steel mills production is just 20%.

Due to the rapid growth of Chinese economy for past a couple of years, the demand for iron ore has been significantly increasing however the supply can’t keep up with this in a timely manner. One of the main reasons can be attributed to the lack of infrastructure. Infrastructure is an essential factor in mining business and needs substantial feasibility study, financial justification and governmental support as well because lots of capital expenditure should be implemented.

Surpassing demand for iron ore temporarily caused spot price of iron ore to be much higher than benchmark price which had been price settlement mechanism before 2010. It brought major suppliers to come up with a new price system, so called index price which depends on spot price and steel mills inevitably accepted it in 2010.

참고 자료

U.S. Geological Survey website (USGS) [Online]. Available from: <http://minerals.usgs.gov/minerals/pubs/commodity/iron_ore> [Accessed: 15 November 2010].
Korea Economy Newspaper website, Article, [Online]. Available from: <http://s.hankyung.com/news/app/newsview.php?aid=2009121777321&sid=0101&nid=291&type=0> [Accessed: 15 November 2010].
World Steel Association website, steel statistical yearbook archive, [Online]. Available from: <http://www.worldsteel.org/?action=stats_search> [Accessed: 15 November 2010].
World Steel Association website, worldsteel top producers 2009, [Online]. Available from: <http://www.worldsteel.org/?action=programs&id=53> [Accessed: 15 November 2010].
Reuters website, BHP and Rio scrap $116 billion iron ore joint venture (Article), [Online]. Available from: <http://www.reuters.com/article/idUSTRE69G10Z20101018> [Accessed: 15 November 2010].
Intercontinental Exhange (ICE) website, Iron ore index-based physical pricing and swaps, 4 March, 2010 [Online]. Available from: <https://www.theice.com/productguide/ProductGroupHierarchy.shtml?groupDetail=&group.groupId=15> [Accessed: 15 November 2010].
Jim Lennon, Max Layton, Colin Hamilton, Bonnie Liu, Hayden Atkins, Duncan Hobbs and Graeme Train, September 2010, Commodities outlook “Less panic, still opportunity”. (Macquarie Commodities Team publishing)