28 Feb, 2023

Major iron ore miners' Q4'22 output rises despite sharp Russia, Ukraine losses

By Anthony Barich and Anna Duquiatan


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Drill supervisor at Rio Tinto's West Angelas mine in Western Australia. Output by 20 of the world's largest iron ore producers rose in the fourth quarter of 2022.
Source: Rio Tinto Group

Iron ore production from 20 of the world's largest producers edged up in the fourth quarter of 2022, despite significant losses among Russian and Ukrainian players.

An S&P Global Market Intelligence analysis of the largest mined iron ore production reported in the December 2022 quarter showed overall output at 359.3 million tonnes, rising 2.2% from the prior quarter and inching up 0.3% from the prior-year period.

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While more than half of the companies analyzed improved their production over both time periods, Metinvest BV stood out for having the sharpest production drop, with its quarterly output plunging by 6.7 Mt, or 86.8%, year over year to just over 1 Mt.

The Ukraine war "caused intragroup consumption to plummet given the shutdown of the Mariupol steelmakers since the end of February 2022 and a substantial drop in local demand," according to Metinvest's Feb. 17 fourth-quarter operational results statement. Constraints on export logistics amid the blockade of Ukraine's Black Sea ports also hit output.

Russia's PJSC Magnitogorsk Iron & Steel Works had the largest quarter-over-quarter decline of the analyzed companies, down 19.7% to 554,000 tonnes. The U.S. Treasury Department sanctioned the company and its majority owner and Chairman Viktor Filippovich Rashnikov in August 2022.

India's big producers outperformed the pack, with NMDC Ltd. booking the largest quarter-over-quarter lift, up 50% to 10.66 Mt, while Vedanta Ltd. reported the largest year-over-year improvement, up 25% to 1.5 Mt.

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Rio Tinto Group had the largest year-on-year jump by volume: Its 5.85 Mt increase was more than double the production increase of the next biggest improver — fellow West Australian-focused iron ore major Fortescue Metals Group Ltd.whose output increased 2.8 Mt.

Champion Iron Ltd. had the third-biggest improvement in terms of tonnage, with mined output increasing by 949,300 tonnes, or 47.2%, over the period, albeit off a lower base than BHP Group Ltd., which produced 800,000 tonnes more than during the prior-year period.

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Vale SA was the only company in the top-five iron ore producers with mined production that fell year over year, from 81.68 Mt to 80.85 Mt. But it is projecting a higher average iron content in its iron ore portfolio starting in 2023, CEO Eduardo Bartolomeo told a Feb. 17 analyst call.

"This would give us much higher quality premium on prices," Bartolomeo said. "It's a quality and a price game."

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