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Preparing for new and renewed challenges and implementing counter-strategies

Posted by: Emily Lehmann

February 26, 2018

Keith ViningBy Keith Vining

Understanding iron ore potential and beneficiation

2017 was a challenging year for iron ore mining and processing. An increased focus on air quality in China drove increases in price differentials between benchmark and sub-benchmark ores.

At the front of everyone’s mind: the iron ore price fluctuations that look set to continue this year, including the discounts being applied to lower-grade ore. It’s clear that there are continued pressures in store for 2018 — and the environment is changing to one of value over volume. Key to this is understanding ore potential, how to maximise value and the trade-off between value uplift and processing cost.

The state of iron ore

Ores with a higher Fe content are increasingly being favoured and attracting price premiums, while ores with a lesser iron ore content (58% Fe) are being discounted by up to 45%, at an average rate of 35%, of the 62% Fe value1 and 2. As demonstrated in the graph below, since 2016 there has been a growing divergence between the price of premium and discount iron ore. As you prepare for the year ahead, this trend underscores the importance of understanding an ore’s full potential and what options exist for cost-effective beneficiation to upgrade your ore.

Line graph
Data source: MB Iron Ore Index

In 2018, producers of ore that may incur a price penalty (for sub-benchmark Fe or high deleterious impurities) are facing the choice of accepting the lower return to retain market share, or finding a way to upgrade their product to maximise value — especially in higher-cost mining operations. Growing supply and moderating demand places a greater emphasis and urgency on this decision.

Value over volume and combating low-grade discounting

A primary buffer against declining prices is the ability to produce higher quality ore that will sell at a premium, however hitting the sweet spot between value uplift and processing cost is important. Two strategies may be particularly helpful in pursuing this balance:

1. Use an early detection strategy

One of the best ways to improve ore quality is to understand your upgrading options. This lets you select a sweet spot before locking in mining and processing options.

With the pressures looming ahead, getting more precise before resource strategy decisions are made is no longer just an option — but a strategic necessity.

In a previous blog, we discussed the importance of performing up-front characterisation of ore when evaluating potential deposits. This can help produce a higher quality and more consistent final product through improved processing.

Not using characterisation early in the decision-making process increases your risk of:

  • making decisions without being fully aware of an ore’s potential (or lack of)
  • missing opportunities to extract greater value from ore and producing a more attractive product
  • missing opportunities to avoid the subgrade/below-benchmark discount
  • suffering a higher proportion of product rejected to tailings
  • failing to achieve maximum product value
  • failing to optimise R&D expenditure.

Characterising ore thoroughly before undertaking beneficiation test work provides critical information about whether an ore can be upgraded and the most prospective beneficiation routes.

Without this upfront ore characterisation, you risk undertaking trial and error test work which may return sub-standard or confusing results.

2. Understand the deportment of impurities, not just overall chemistry

Common perception says that grinding will liberate many impurities — which can then be removed in subsequent processing. However, impurities can be in discrete phases, very finely disseminated, or even substituted into the lattice of iron-bearing minerals – and without an understanding of the deportment of these impurities, it is difficult to make optimal decisions regarding processing. For example, in discrete phases these impurities can be removed but, firstly, you need to understand the optimum grind size. Without this, effective liberation is at risk and grinding time and energy consumption may be wasted.

In instances where impurities have substituted into the lattice of iron-bearing minerals beneficiation will not be possible. While this may not be desirable, armed with this information you can make an informed decision about embarking on a beneficiation test work campaign.

Don’t go in blind — how CSIRO can help upgrade your ore quality

CSIRO has extensive expertise in ore characterisation including the key characteristic of texture.

We can help you assess a deposit’s potential for upgrade, and analyse your feed and process to identify ways to improve productivity and reduce processing cost.

Our first pass mineralogical investigations will pinpoint:

  • the potential for and extent of upgrading possible
  • how best to process an ore for optimum return.

We employ a methodology for driving beneficiation strategy based on a thorough understanding of the ore characteristics. With this process we can confirm the quality of the product using sintering and product evaluation.

The result: more effective use of R&D; greater utilisation of resources; lower processing costs; and improved ore quality, production, revenue and profitability potential.

Why not tackle 2018 head-on with the knowledge, technology, and support to produce the best possible product for a challenging market?

The Carbon Steel Futures team at CSIRO, through our research and breakthrough science, is uniquely positioned to add value to your operation. Through ongoing analytical support, training, or product development, we can help you plan for the year ahead and optimise your operations.

Want to know more about how we can help you with ore characterisation? Give me a call on +61 07 3327 4761 or email me directly on Keith.Vining@csiro.au

1 Source: Resources and Energy Quarterly December  2017 – Iron Ore (Australian Government / Office of the Chief Economist)

2 Source: Mining Industry Outlook – Key themes in Chin to look for in 2018 (S&P Global Market Intelligence)