fmg

Hi.

I'll try to explain why it would be virtually impossible for IOH to get any deal with FMG. I won't be replying to this post. If you wish to denigrate this post that's up to you. But it won't change the truth.

You cannot blend IOH's ore with FMG's. The geology and metallurgy of the ores are very different. IOH ores are/were identical to their neighbors RIO and BHP. So in that case a mine gate sale or sellout was appropriate. RIO was interested in a sintering blend. Sintering is the process of converting fine ore to Lump ore so that it can go into the blast furnace.

Anyways, FMG's ore is bedded hematite Marra Mamba. The mills prefer to do their own mixing and as the two ores are so different, there is no upside for either company to blend. IOH MUST blend their ore because IOH's Phosphorus level is 0.14%.

Everyone concentrates on Fe grade as they don't know any better. Iron grade is important, but the grade of the other elements is also very important. It is frustrating that the ASX does not enforce the reporting of the other elements, called Deleterious Elements (DE) such as SiO2 (silica), Al2O3 (Alumina), P (phosphorus), S (Sulphur), and LOI (Loss on ignition). Several other elements can also be considered DE but the ones above are by far the most common.

Silica and Alumina are DEs that affect the blast furnace. P and S affect the quality of the steel. P is especially bad as it makes steel brittle.

Steel makers can blend different ores with different DEs to achieve a proper blend for their furnace. The usual specifications they are after for furnace feed is <2.5% Al2O3, <5.5% SiO2, (or Al2O3 + SiO2 <8%), <0.07% P, and <0.1% S. LOI needs to be low for lump ore but can be high for fines ore as the crystallized water and carbonates are burnt off in the sinter process resulting in an upgrading of the iron grade!

If an ore falls outside these specs, it can still be sold as the steel mill normally blends ores from different sources to acheive the desireable feed grade.

However if ore falls outside the specs, the buyer may require a discount for the DEs.

Hi P ores, any ore over 0.07%, can be a problem to sell. Pilbara Blend is a RIO product at 0.10% P but is used as a sinter feed blend. Higher P can be sold, but only in smaller consignments as the mills have to find low P ores to blend which means holding stocks of Hi P ore which costs money.

Hi P ores have to be sold at a discount and ore of IOH's P grade: P - 0.14%, might need to be sold at between 10 and 25% discount. I've never seen anything in IOH's material explaining what if any discount they expect nor how they propose to sell hi P ore into the market.

Some people talk about "de-phossing" but this can only be done by acid leach or akali-leach and is obviously expensive. Some chinese ores are >1% P so they are obviously working on it.

Bye