Credit to @Crackfox69 as their primer on Fe grades explains why I believe Macro will be successful, even IF some of their projects are "low grade" IO:
Low and mid grade still certainly have a place, low grade discounts are relatively good atm, historically speaking, and can still have great margins made. Grade isn't the end of the world as you talk about on this forum.
But more importantly, high grade premiums have been depressed the last few years and will continue to for a couple more most likely as China's margins are low to negative - so they use cheaper low grade over the high grade. Why do they want to pay more for all this 65% fe ore? Coal is cheap, no need to make alot of steel, margins poor...why? China and what they do, answers this for you.
The VIU of low grade iron ore is relatively good at this price - and the Japanese have known this for 60 years and made JV's before China knew what IO was. Think the low grade low alumina robe valley or Yandi ores - perfect for blast furnaces and perfect to offset high silica brazil ores.
All of this iron making business is VIU and the right blending for the blast furnace.
There is a reason low grade projects like Onslow and others are getting up, there is still projected demand for low grade and one of the outcomes of Onslow its its suitability for blending with high grade ore, such as the HG Itabrite. For someone like you who should know - Brazilian Carajas High grade sinter fines for example cannot be sintered alone or even at high blend ratios, and require alot of low grade in the mix to create a suitable sinter for the blast furnace. The silica, grain size and overall gangue characteristics of lower grade Pilbara ores are perfect for this.
For those not in the IO game - once a low grade ore is sintered it is calcined, a fancy word for having the moisture cooked out of it, and the Fe will typically go from say a 58% to a 63-64%, pre Blast Furnace addition. Just want to provide a little side info here to reverse the simplistic thinking of grades.
Low grade isn't rubbish. It is sought after y giant Japanese and Chinese businesses to form JV's with pilbara miners and others. It has a place and deserves exploration and investment. It is the blend feed to high grades to create the typical mid grades that most of Chinas mills need.
You think low grades aren't great? Ask India and the 40 million tonnes they will ship this year at 54-57%fe if they found a home in blast furnaces in China.....i can tell you only a few million tonnes of this 'not important you should only look at 65% HG ore' remain in port stocks, the rest was actually blended with high grade ore to meet customer VIU requirements.
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