Iron ore is a globally traded product. Around 1.5 billion tonnes are shipped by sea each year from a variety of supplier countries, including Norway, Sweden, Brazil, Australia, Canada, South Africa and India. Chinese steel mills are the key customers, consuming over 1.1 billion tonnes of these seaborne tonnes, while Europe, Middle East and Asia consume the remaining 400 million tonnes.
Sydvaranger aims to sell its high grade environmentally-friendly product to all the key regional consumers, across Europe, Middle East and Asia. Also being evaluated is the potential to enable the Kirkenes port to berth larger vessels and reduce overall freight costs so longer distances can increase the market opportunities for our product.
Iron ore prices are quite volatile and can typically trade in a $20/t plus or minus range within a single year, above and below recent averages of $80/t. Prices can be buffeted by extreme season weather influences such as rains and cyclones, impacting both suppliers at the mining operations and the consumers at the steel mills. This can lead to large short-term swings between supply and demand. Prices can also be impacted by government policy decisions, as well as other global events such as the current COVID-19 crisis. Sydvaranger’s investment plans are designed to deliver a long term and robust operation able to withstand market price volatility and return value to all its stakeholders over the life of the mine.