Mining companies in Australia build their business off the back of the price of iron ore.
With fluctuating iron ore prices, how confident are mining companies about the short-term price and why does it affect mining jobs?
Last week, Australian mining companies breathed easier after the price of iron ore started to gain new ground. In an amazing recovery, the price of iron ore jumped 3.8 per cent. Not long ago the iron ore price rose to around $130 a tonne, which created some nice profit margins, especially for some of Australia’s bigger, well-known mining companies.
“cashed-up mining companies have invested heavily in new technology”
The big three mining companies involved in iron ore mining in Australia are Rio Tinto, BHP Billiton and Fortescue Metals Group. These innovative, cashed-up companies have invested heavily in new technology over the past 12 months in order to drive down costs and boost productivity.
As a result, it was reported by iMINCO last year that these particular companies had cash costs per tonne of iron ore somewhere in the region of $US45.
Keeping Australians employed in mining jobs.
These types of profit margins are just what mining companies in Australia need in order to sustain the levels of productivity and keep Australians employed in mining jobs.
Smaller iron ore mining companies like, Arrium, BC Iron and Atlas Iron have a different story to tell as some of these miners have different cash cost in terms of their smaller scale of mining operations and available investment cash.
Take Atlas Iron, who have mining projects in the Western Australian Pilbara region. Recent reports indicate their break-even costs for iron ore mining per tonne are somewhere in the region of $US75-80.
“the Aussie mining company is making money”
Given where the price is now the Aussie mining company is making money and there’s plenty more pain they can sustain before it gets to a stage where they start to struggle financially.
Despite it’s size, Atlas recorded a net profit of $73.7 million in the first half of the 2013/14 financial year. This progressive mining company increased its full year production target to between 10.2 million and 10.7 million tonnes. This is after it shipped a record 5.1 million tonnes of iron ore during the first half of the year.
Looking ahead, Atlas has a strong vision and is determined to become a significant player in the iron ore industry in Australia as it sets its sights on a whopping 46 million tonnes per annum.
BHP & Rio Tinto set the bar high
On the other side of the coin are the big Australian mining companies like BHP Billiton who made a statement to the media saying that despite price slumps of the past year demand for iron ore will continue to grow over the next decade.
“half of BHP’s earnings are generated by iron ore”
Half of BHP’s earnings are generated by iron ore mining so they have a strong focus on sustaining their investments.
Seen as the world’s largest mining company, BHP is ploughing ahead and aiming for a production target of 212 million tonnes per annum this year with ambitious plans to expand its future iron ore output in the Pilbara to 260-70 million tonnes a year.
One of the biggest customers for Australian iron ore is China. Steel output in China has risen 6 per cent a day to 2.08 million tonnes in late February. This is in direct comparison with the average of 2.07 million tonnes over the last 12 months.
“still a high level of optimism in the industry”
Despite the slow-down in the Chinese economy and the jogging pace of the Chinese urbanisation projects, there is still a high level of optimism in the industry.
BHP Billiton said in their view Chinese crude steel production would peak at 1.1 billion tonnes, around 2025, which means there is plenty of life in iron ore mining in Australia.
“Rio Tinto has maintained its mining targets”
Rio Tinto iron ore chief executive Andrew Harding said the longer term for supply to China is still intact, there is no reason the forecast needs to be changed. The mining company had maintained its mining targets to get to 290 million tonnes per annum.
Price volatility in the Australian iron ore mining industry is expected and there will continue to be highs and lows on a regular basis. However, the big mining companies in Australia seem confident of a steady iron ore mining industry in Australia.
“billions of dollars are being invested”
Of course, we can look at the additional mining activity in the Pilbara and look to Gina Rineharts’s Roy Hill mine which is currently under construction. Billions of dollars are being invested in this new iron ore mine which is expected to produce somewhere in the region of 55 million tonnes of iron ore per year.
When you consider the size of this investment, there seems little doubt that iron ore mining in Australia will continue to be a major employer for thousands of local and FIFO workers.
Learn more about iron ore mining in Australia
Mining companies in Australia are digging for the long term when it comes to iron ore mining. The natural resources of Australia have allowed the mining industry to establish a foothold in the global market for iron ore. Fueled by Chinese and Japanese urbanisation and industrialisation, the demand for iron ore still remains steady.
Mining technology has changed over the years. Bigger and more complex machinery and processing plants on mine sites have created a new era in mining jobs. People looking to work in Australian iron ore mining operations would be advised to do the research on what is happening right now. Information and knowledge are one of the success secrets to getting a mining job in the iron ore capital of Australia – Western Australia.
Here is a collection of some of the most relevant iron ore mining articles, people looking for WA mining jobs will find very helpful.
- Fortescue Metals ““ WA Jobs for Port Hedland
- WA Jobs With Fortescue Metals
- Pilbara mining jobs ““ Fortescue
- Rio Tinto Jobs ““ 760 Mining Jobs for WA
- Rio Tinto and BHP Jobs
- Rio Tinto Jobs ““ WA`s North a new jobs hotspot
- Plenty Of Rio Tinto Mining Jobs In Pilbara
- WA Jobs ““ $300M BHP Port Hedland Expansion
- Pilbara Mine Jobs ““ Rio Tinto Jobs ““ BHP Jobs
Entry-level jobs in iron ore
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