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ArcelorMittal plans major EAF, DRI investments for decarbonizing steel production in Canada

ArcelorMittal announced with the Government of Canada its intention for a CAD 1.765-billion (US$1.4-billion) investment in decarbonization technologies…

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This article was originally published by Green Car Congress

ArcelorMittal announced with the Government of Canada its intention for a CAD 1.765-billion (US$1.4-billion) investment in decarbonization technologies at ArcelorMittal Dofasco’s plant in Hamilton.

At the heart of the plan is a 2 million tonne capacity Reduced Iron (DRI) facility and an Electric Arc Furnace (EAF) facility capable of producing 2.4 million tonnes of high-quality steel through its existing secondary metallurgy and secondary casting facilities.


Innovative DRI. Source: ArcelorMittal


Modification of the existing EAF facility and continuous casters will also be undertaken to align productivity, quality and energy capabilities between all assets in the new footprint.

The intended investments will reduce annual CO2 emissions at ArcelorMittal’s Hamilton, Ontario operations by approximately 3 million tonnes—approximately 60% of emissions—within the next seven years.

ArcelorMittal will introduce new manufacturing processes that contribute to a considerable reduction of CO2 emissions and deliver other positive environmental impacts including the elimination of emissions and flaring from coke-making and ironmaking operations.

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Smart Carbon. Source: ArcelorMittal


The investment is contingent on support from the governments of Canada and Ontario. The Government of Canada announced it will invest CAD 400 million (US$321 million) in the project. The company is in discussions with the Government of Ontario regarding its support.

The new DRI and EAF will be in production before the end of 2028.

This project is part of ArcelorMittal’s new global 25% CO2 2030 emissions reduction target which was announced yesterday in our second climate action report. DRI-EAF technology, such as that being introduced in Dofasco, is at the heart of our new target although we do also continue to develop our smart carbon technology route. Transitioning from the blast furnace route to the DRI-route offers an immediate significant reduction in emissions in the first phase through natural gas and then in a second phase, which we call innovative DRI, harnessing green hydrogen or other Smart Carbon technologies.

This is the first significant decarbonization project we have announced outside Europe and again reflects ArcelorMittal’s determination to lead the decarbonization of the steel industry. Across the company our people are highly motivated to demonstrate that steel can reach net zero and will be the core material for a carbon-neutral world. This project in Dofasco is a very significant and important milestone in this journey.

—Aditya Mittal, CEO ArcelorMittal

ArcelorMittal has an ambition to be net-zero by 2050. The company recently published its second group Climate Action Report in which it set a new 2030 global carbon emissions intensity reduction target of 25%. It has also increased its European 2030 carbon emissions intensity target to 35%, from 30%.

ArcelorMittal estimates the cost of achieving its global 2030 carbon reduction target is around US$10 billion and believes government funding support of approximately 50% is required to enable the company to remain competitive regionally and globally through the transition period given the capital investment required and higher operating costs of low-carbon steelmaking technologies.

The company expects to deploy approximately 35% of this $10-billion investment by 2025 with the remainder in the second part of this decade.

The Company has developed two technology pathways, Smart Carbon and Innovative DRI, both of which it believes will have an important role to play in helping the company achieve net zero by 2050.

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Monsters of Rock: New Hope turns to profit as coal miners remain buoyant

Timing is, as they say, everything. Coal miner New Hope Corporation’s financial reporting period is one example of that. While … Read More
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Timing is, as they say, everything.

Coal miner New Hope Corporation’s financial reporting period is one example of that. While most companies go by calendar or financial year, New Hope (ASX:NHC) reports from August to July.

That allowed it to soak up some of the coal bull market which has driven domestic price in China up by the hour to as high as US$670/t.

Australian producers are locked out of China at the moment due to the less-than-friendly relationship between our governments and their ability to (painstakingly) source supply from elsewhere.

Premium hard coking coal out of Australia is still up at historic highs of US$385/t though, with thermal and lower quality coking coal also generating consistently good gross margins.

While many Aussie coal miners still booked losses for FY21 while using their commentary to celebrate bullish market conditions of the 2022 financial year, New Hope gets the best of both worlds.

Thermal coal prices have risen sharply as well. Pic: New Hope Corporation

 

Production down, profits up for New Hope

New Hope’s production fell at its east coast coal assets from 11.3Mt in 2020 to just 9.6Mt in 2021, but saw its underlying EBITDA soar by 78% from $290 million to $367 million.

It swung from a $157 million loss to a net profit after tax of $79 million, backing a final dividend payment of 7c and a full year dividend total of 11c a share.

CEO Reinhold Schmidt said both improved prices for thermal coal and cost discipline underpinned the final result.

“The Newcastle 6000 Index hit 10 year highs by financial year end rapidly recovering from the depressed market conditions experienced at the start of the financial year. The Company achieved an average realised price of $101.36/t in 2021. At 31 July 2021, the Newcastle 6000 Index had almost doubled from January 2021 levels, to USD$150 per tonne, and has continued to trend upwards,” he said.

“The Company also benefited from reduced underlying Free on Board cash costs of $63.70 as a result of cost savings implemented at both Bengalla and New Acland, and the rationalisation of the Brisbane corporate office.”

New Hope’s realised prices doubled from the first quarter to the final quarter of the year, when it sold coal at an average of ~US$120/t, prices that would be mild by today’s standards, even for thermal coal.

 

New Hope Corporation share price today:

 

 

Is a correction coming in coal prices?

It is a largely accepted narrative that China’s ban on Australian coal has played a big role in the meltdown of its supply chain.

The trade between the nations was the sun around which the solar system of the met coal trade revolved, as BHP famously says, and the removal of 24mt of imports from Australia left China 16Mt short year on year.

The redirection of Australian rock elsewhere has seen China lean on its decrepit domestic mines, production from across the inland border in Mongolia and the US, Russia and Canada.

US, Russian and Canadian mines don’t export enough to satisfy China’s hungry steel and energy sectors, and Mongolian product has been hamstrung by Covid restrictions.

According to UBS, China’s imports are down around 16Mt year on year, leaving it well short of requirements and fuelling a squeeze on supplies.

But as we’ve seen in iron ore, what goes up must come down at some point.

“We expect met-coal prices in China to turn down before end-2021 with demand weakening and supply lifting; average met-coal prices are however set to remain elevated in 2022, averaging ~US$190/t (broadly flat y/y) as inventories are low and trade tensions between Australia & China are unlikely to ease near-term,” UBS analysts led by Myles Allsop said.

 

Will steel cuts come for coal too?

Steel production cuts and concerns around China’s struggling and debt-laden property sector that have hit iron ore could strike the end market for coal as well.

“We expect China steel output (and pig iron production) to slow into 2022 against a less favourable economic backdrop; there are also increasing signs that major China steel mills plan to cut output in 2H21 to achieve the central government’s directive of keeping annual production unchanged vs 2020,” UBS said.

“To this extent we have noted a sharp slowdown in crude steel and pig iron output so far in 3Q21.”

Higher prices could also bring supply on in China despite efforts to curb production due to safety concerns and pollution crackdowns.

“Given how elevated prices are, we expect met-coal supply to lift in China domestically over the coming months. This, combined with weaker pig iron production / met-coal demand and some alleviation in the power shortage, is likely to trigger a correction in China domestic prices from current record levels,” the analysts noted.

“The magnitude of the supply response in China may however be capped by 1) government control and 2) geological resource.

“Further, low coal inventories and the decline in the iron ore price may allow for increased tolerance of higher coal prices over the next 6 months.

“Outside China, we expect supply to lift in Australia with BHP able to lift production if prices stay high and Anglo to normalise supply/ debottleneck the Moranbah & Grosvenor complex.”

 

What happened on the markets?

The iron ore price feel even further overnight in the direction of US$90/t, but investors laid off the selling after yesterday’s $50 billion bloodbath.

Singapore iron ore futures were also largely unchanged.

BHP (ASX:BHP), Rio (ASX:RIO) and FMG (ASX:FMG) all held around yesterday’s trading levels and the ASX 200 Materials sector was up slightly.

Champion Iron (ASX:CIA), a pick from Tribeca Investment Partners head of research Todd Warren for when the iron ore price bottoms out, was one of the most productive mid caps.

$2.3 billion-capped Champion, which runs the Bloom Lake mine in Canada, was up more than 4% at 3.50AEST.

$2.8b rated Whitehaven Coal (ASX:WHC) also returned to winning ways with a similar gain.

 

Champion Iron and Whitehaven Coal share prices today:

 

The post Monsters of Rock: New Hope turns to profit as coal miners remain buoyant appeared first on Stockhead.

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Sultan Resources ready for 1000m drill program at Razorback Ridge

Special Report: Sultan Resources will get stuck into drilling at its high quality Razorback Ridge target in the East Lachlan … Read More
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Sultan Resources will get stuck into drilling at its high quality Razorback Ridge target in the East Lachlan Fold Belt in New South Wales.

The skarn-like gold copper target has returned a series of intriguing rock chip samples for Sultan (ASX:SLZ) across a 1km long structure, with a 1000m diamond drill program consisting of nine holes at three drill sites planned to test beneath the surface.

Soil sampling has defined a large gold and copper anomaly covering some 1500m by 200m abutting its Big Hill porphyry target.

Previous results from rock chips include:

  • 0.98g/t Au & 2.65% Cu
  • 0.55g/t Au & 2.24% Cu
  • 0.62g/t Au & 2.42% Cu
  • 0.64g/t Au & 2.00% Cu
  • 0.99g/t Au & 2.09% Cu
  • 1.12g/t Au & 0.1% Cu
  • 1.69g/t Au & 0.09% Cu
  • 1.14g/t Au & 0.1% Cu, and;
  • 2.25g/t Au & 0.07% Cu.

Razorback Ridge outcrops missed by old timers

While Razorback Ridge is marked by a north-northeast striking zone of outcropping skarn-style mineralisation that is exposed for over 1km in a copper rich district hosting some major mines, it was unrecognised by previous explorers.

Hosted in quartz sulphide vein breccias showing quartz – Fe carbonate – chlorite – sulphide – hematite +/- magnetite altered limestone and chlorite altered mafic volcanics, the mineralised outcrop is strongly coincident with a prominent north-south striking linear magnetic feature.

Sultan is especially excited about rock chip results of up to 2.25g/t Au and up to 2.65% Cu that have been returned from outcrops.

Drilling at Razorback Ridge will be relatively shallow at first and is designed to provide structural orientation, before follow-up holes target the structure at depth.

Sultan says it will use an environmentally friendly track-mounted drill rig and comply with all COVIDSafe requirements during the drilling program, which is due to start in mid-October with all regulatory approvals, landowner compensation agreements and drill contracts finalised.

It adds to the prospectivity of the Big Hill porphyry prospect, where Sultan says three recently drilled holes returned elevated copper and pathfinder elements in zones of porphyry-style alteration.

Those results strengthened the prospectivity of the area to host a porphyry system similar in geological style to Newcrest’s nearby Cadia gold mine, the largest in Australia.

Sultan’s projects are in the vicinity of some absolute monsters. Pic: Sultan Resources

Big Hill drilling picks up positive pathfinders

Drilling is yet to hit the mother lode at Big Hill, but assays from the first three drill holes put into the porphyry target have given confidence it bears similar pathfinders to the 50Moz Cadia-Ridgway mine.

“The results show elevated responses in a number of important elements at levels that are consistent with the interpretation that the drilling has intersected the distal alteration halo of a potential alkalic porphyry system,” Sultan said.

“The average copper throughout the altered volcaniclastic units across all three holes is approximately 100ppm Cu and up to 385ppm Cu locally.”

At Cadia, about 50km south of Big Hill, Sultan says those pathfinders and copper rich anomalies are found a couple hundred metres from high grade gold and copper mineralisation.

“Future step out drilling at Big Hill will aim to map an increase in distribution and intensity of the characteristic ‘reddened’ inner propylitic alteration zones to allow vectoring to the potential high grade Au-Cu porphyry core. Current drilling is likely to be >200m from an intrusive centre based on the Ridgeway model,” the company said.

 


 

 

This article was developed in collaboration with Sultan Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post Sultan Resources ready for 1000m drill program at Razorback Ridge appeared first on Stockhead.

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Teck, Copper Fox peg Schaft Creek cost at US$2.65B

  VANCOUVER – Copper Fox Metals Inc. [CUU-TSXV, CPFXF-OTC] on Monday released the results of a preliminary economic assessment (PEA) for the Schaft…

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VANCOUVER – Copper Fox Metals Inc. [CUU-TSXV, CPFXF-OTC] on Monday released the results of a preliminary economic assessment (PEA) for the Schaft Creek copper-molybdenum-gold-silver project in northwestern British Columbia.

PEA highlights include a smaller project footprint and the ability to access hydroelectric power from the existing provincial power grid, factors that are expected to reduce the capital costs and lower project CO2 (carbon dioxide) emissions.

Shaft Creek is one of two advanced stage projects in Copper Fox’s portfolio that contain significant quantities of copper, gold, and molybdenum. The other is the 100%-owned Van Dyke in-situ copper recovery project, which is located in Arizona

Schaft Creek ranks as one of the largest undeveloped porphyry copper-gold-molybdenum-silver deposits in North America. It covers 55,779.56 hectares of mineral concessions, located in Tahltan territory approximately 60 kilometres south of Telegraph Creek, near existing transportation and energy infrastructure.

Copper Fox holds a 25% carried interest in the Schaft Creek joint venture. Vancouver-based metals giant Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE), owns the other 75% and is the project operator.

Schaft Creek is a conventional truck-and-shovel development opportunity with scale and optionality. In the first five years of full operation, it has the potential to produce 398 million copper equivalent (CuEq) pounds or 181,000 tonnes per year.

In January, 2013, Copper Fox released the results of a feasibility study for Schaft Creek. The study concluded that a 130,000 tonnes-per day conventional open pit mine could be developed at the site at a cost of $3.26 billion and would produce copper and separate molybdenum concentrates over a lifespan of 21 years.

However, in new PEA, the initial capital cost has been reduced to US$2.65 billion, which sustaining capital costs have been cut to US$848.7 million from US$1.2 billion. Other key changes include a reduced strip ratio, and a relocation of the milling facility closer to the pit.

Total mine production is estimated at 1.03 billion tonnes of mill feed and 1.03 billion tonnes of waste rock, resulting in a life of mine 1:1 strip ratio.

The processing plant is designed with a planned nominal throughput of 133,000 tonnes per day (at 92% capacity), with the annual throughput varying from 48.5 million to 51.5 million tonnes per year, averaging 49.1 million tonnes annually.

The bulk concentrate produced will be separated to produce market grade copper-gold-silver concentrate and molybdenum concentrate.

“We are very pleased with the results of the PEA and the recommended program work of $23 million that could be considered by the operator to advance the Schaft Creek project to the prefeasibility stage of study and evaluation,’’ said Copper Fox President and CEO Elmer Stewart.

On Monday, Copper Fox shares eased 1.5% or $0.005 to 32 cents on volume of 240,650. The shares are currently trading in a 52-week range of 66 cents and 10.5 cents.

Teck’s Class B common shares eased 3.5% or $1.09 to $30.33 on volume of 1.7 million. The shares trade in a 52-week range of $34.25 and $15.81.

 

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