Skillings February 2019

2019 FEBRUARY IN REVIEW

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Vol:108.No:02

1912-2

FATALITY FIGURES IN THE MINING INDUSTRY

019

WHAT’S AHEAD FOR IRON ORE 2019 P 06

$9.9 MILLION TO DEAL WITH DREDGED P 14

INSIDE STATISTICS

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2 | SKILLINGS MINING REVIEW February 2019

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...From the Editorial Desk FEBRUARY 2019 VOL.108. NO.02

U

nited

States Steel Corporation (USC)

frees up its bottom line

using its earnings level exceeding its average level, by over 100%.

Not

only did it enhance its expansion, its performance.

an sign for the long run.

The

powerful health of

USC

This

is

implies that its

upcoming liability payments all are able to be fulfilled by its short-term and cash investment holdings.

Skillings Mining Review publishes comprehensive information on global mining, iron ore markets and critical industry issues via our monthly magazine, weekly E-newsletter, annual mining directory and real time website.

It seems to have made great use of debt, making operating cash amounts of 0.39x overall debt in the previous calendar year. This is a powerful sign that debt is satisfied with cash. USC manages price levels and its money which is an integral determinant of the health of their company.

PUBLISHER CHARLES PITTS chas.pitts@skillings.net

USC is trading under its peers to earnings. USC is now trading below its true worth, so that the market is undervaluing the company cash flow. This mispricing provides investors the chance to buy in the inventory at a price that is inexpensive compared to the value they'll receive, in case analysts' consensus forecast expansion be right. In comparison to the Remaining mining and metals sector.

MANAGING EDITOR JOHN EDWARD john.edward@cfxnetwork.com SENIOR SALES MANAGER STAN SALMI stan.salmi@skillings.net SALES REPRESENTATIVE, CANADA RON SANDERSON ron.sanderson@cfxnetwork.com CONTRIBUTING EDITORS SARAH HART KATIE SIMS DAVID WILSON CAROLINE DAVIS ART DIRECTOR MO SHINE mo.shine@cfxnetwork.com CIRCULATION & SUBSCRIPTIONS Subscriptions@skillings.net SALES & MARKETING CHRISTINE MARIE advertising@skillings.net

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February 2019 SKILLINGS MINING REVIEW | 3

IN THIS ISSUE

WHAT’S AHEAD FOR IRON ORE 2019 P 06

P 10

$9.9 MILLION TO P 16 DEAL WITH DREDGED

FATALITY FIGURES IN THE MINING INDUSTRY

RISE OF THE ROBOT

COMMENTARY

IRON ORE

commentary...............................................................03

Nonferrous Metallic Minerals Leases Plan..............14

COVERSTORY

Market 2019 of Cleveland-Cliffs 2.0..........................15

what’s ahead for iron ore 2019..................................06

Vale Iron Ore Quality..................................................20

IRON RANGE REGION

Allete Clean Energy’s demand for wind....................08

Minnesota Department of Natural Resources- Sarah Strommen....................................20

The New Hibbing Taconite Managing

MINING FINANCE

Partner: ArcelorMittal USA.........................................09

Cleveland-Cliffs Share Repurchase Program...........05

$9.9 million to Deal with Dredged ............................16

MINING INDUSTRY AUTOMATION

IRRR Board approves rebates

Rise of the Robot: Fatality Figures

and infrastructure grants...........................................18

in the mining industry................................................10

Statistics.............................................................. 22/23

4 | SKILLINGS MINING REVIEW February 2019

Mining People............................................................ 21

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MINING FINANCE

Cleveland-Cliffs Share Repurchase Program

U

nder the share repurchase program , the business will have considerable flexibility

to purchase up to a max of

$200

million worth of stocks , through acquisitions from the open market or privately negotiated transactions, such as via hastened share repurchases or pursuant to the conditions of a

Rule

10b5-1 program.

The comp a ny i s n ' t r e q u i r e d t o produce any purchases along with the application might be suspended or discontinued at any moment. The consent is busy until December 31, 2019.

Lourenco Goncalves, Cleveland-Cliffs Chairman and CEO, said, "The disconnect between our powerful sustainability and the present volatility in the capital markets has made an extremely accretive utilization of funds by investing in back our own ordinary stocks.

Very similar to what we did a couple of years back using all our debt repurchases at heavy reductions, we're not going to fight the tape, but we'll surely benefit from the exceptional chance that the marketplace has offered to us."

World Gateway for Transloading & Storage of Bulk Commodities

H

allett Dock Company, located in the Duluth-Superior Harbor at the western end of Lake Superior, has been in the business of receiving, stockpiling, screening, and shipping bulk and liquid

commodities since 1961. • Whether transloading chrome ore from Montana to European customers, bentonite from Wyoming to iron ore plants in Quebec or bringing limestone from Michigan for Minnesota’s sugar beet industry—we stand ready to meet your needs.

P.O. Box 16447 • Duluth, MN 55816-0447 (800) 637-4497 • (218) 628-2281 Web: www.hallettdock.com • Email: info@hallettdock.comà

Located at the head of the St. Lawrence Seaway system, we serve customers worldwide

www.skillings.net

Our liquid storage tanks have 2.1 million gallon capacity

We have two docks with seaway draft capacity, and a third surface transloading facility

We’ve been efficiently handling and delivering a wide variety of products for nearly five decades

February 2019 SKILLINGS MINING REVIEW | 5

COVERSTORY

what’s ahead for

iron ore 2019 Iron Ore and Copper accounts for approximately two-thirds of BHP's earnings, whereas Petroleum and Coal include the rest of the one-third. The miner also stated it would mine its own very initial tonnes in the undertaking, which it states it is among the planet's most technologically innovative, in 2021, given it has accepted by the board.

T

his can come out of a blend of meeting or exceeding industry best-practice gear function-

ality over our operations; quantity expansion from new and existing operations , including

Quellaveco ;

along with the installation of our

F uture S mart M ining ™ and digitalisation.

technology

It's these technologies that can change the way we mine, process and advertise our goods, supplying the following step shift in our operation."

Mining, another dominant business in the Australian marketplace, is one we're cautious of because of the downturn in China. Interestingly, although this downturn has been happening, iron ore costs are consistently strong, that has been promoting in the cash flow standpoint for companies such as BHP and Rio Tinto, in that we have pick investments.

The objective of the moves would be to streamline BHP down into only a few important investments, and inside those

6 | SKILLINGS MINING REVIEW February 2019

investments to concentrate on its finest chances. In reality, the firm recently held a seminar devoted to describing its upgraded views on funding allocation.

Management basically confessed that it had not been particularly excellent steward of consumer funding during the previous recession in the cyclical commodity area, also explained why its fresh strategy would be stronger.

Rio will start working its long-delayed AutoHaul robot railroad system at the close of the calendar year, and this will get rid of the logistical bottleneck the miner faces from obtaining iron ore out of the pit into the vent.

"This can come out of a blend of meeting or exceeding industry best-practice gear functionality over our operations; quantity expansion

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correction to get China's standard rebar metal contract. It'll be a brand new manufacturing hub that is going to be an integral attribute for its Pilbara for several years to develop," iron ore chief executive Chris Salisbury stated in a demonstration at Rio's investor afternoon .

from new and existing operations, including Quellaveco; along with the installation of our FutureSmart Mining™ technology and digitalisation. It's these technologies that can change the way we mine, process and advertise our goods, supplying the following step shift in our operation."

The cost of iron ore has shrunk almost 15 percent in the previous 3 weeks, along with the prognosis through 2019 is not especially bright.

Despite improved volatility and uncertainty across the world, Salisbury reported the overall outlook remains strong, especially when considering its larger client - China. The current sell-off was associated with a general downturn in economic development in China, according to a currently stalled manufacturing industry , also waning economic development, which can be predicted to depress demand in the home industry before a seasonal onset of building activity. And iron ore costs are representing a week's keep market

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The mining giant additionally affirmed that 2018 is set to close in a top with manufacturing above previous advice by 2 percent and prices down 5 percent. While there is some danger that the November statistics reveals some winter cuts and a few probable overstocking at September and October to prevent shortages within the weeks beforehand, the analysts stated,"that the end-game is weaker requirement over the winter interval. With metal mill place elevation in China teetering around break-even, the chances in a large stride in iron ore need at the subsequent one-three months seems quite low".

Previously called BHP Billiton, the business experienced a huge restructuring within the previous two decades to narrow its product and geographical focus. Billiton sold all its energy resources from the U.S., together with a smattering of non-core mining possessions. The business used net profits from these sales to repay debt.

BHP, previously called BHP Billiton, is among the world's biggest commodity manufacturers, with substance surgeries in iron ore (approximately 40 percent of inherent EBITA in financial 2018), aluminum (28 percent ), coal (19 percent ), and vitality (14 percent ). Additionally, it has a potash mine beneath thought that, if constructed, are one of the biggest on the planet.

The organization, but has gone through a large overhaul, jettisoning non-core mining resources (through the spin from South32) along with promoting its onshore U.S. drilling firm .

He noticed the mine are the first person to take whole benefit of automation in drilling and trucking.

"In summary, to me that they are all looking very good at this time. Given that I feel the opportunity to begin trying to incorporate them to a portfolio isn't too far off."

It has been hard to maintain several commodity-producer stocks recently, and BHP Billiton isn't any exclusion.

Its stocks are down 3 percent year to date. Macro headwinds and reduced anticipated growth for the country are hitting on against Australian miners.

Nevertheless the companies disagree about things to do with the inventory.

February 2019 SKILLINGS MINING REVIEW | 7

IRON RANGE REGION

farms into the utility firms owned by its parent firm. The organization, based on its parent firm Allete at 2011, has enlarged radically, in part, due to an increasing demand for emission-free and renewable energy. It will help that the price of wind power continues to fall also.

Allete Clean Energy’s demand for wind "I almost think that it's pierced that flooring where it is currently the very appealing and least-cost energy based on areas," Allete Clean Energy's Manager of Business Development Wells McGiffert said, including solar is cheaper in sunny regions of the U.S. such as the Southwest.

B

ut the provider still attempts t o m a i n ta i n i t s p r e s e n t wind-only portfolio varied.

F or the time being , A llete C lean Energy is still currently a wind-only firm, but it is looking to solar energy, natural gas and electricity storage, company officials said.

Though Allete also possesses Superior Water Light and Power and Minnesota Power, Allete Clean Energy offers the energy generated by its wind turbines into other utilities businesses, such as Minneapolis-based Xcel Energy, although the wind turbines it assembles are occasionally then sold to other businesses, such as Montana-Dakota Utilities.

While Allete's controlled utilities --

Minnesota Power, Superior Water Light and Power along with a bet in American Transmission Company -- nevertheless constitute 80 percent of their organization's overall earnings, 46% of this depends from industrial clients.

The organization's business model combines purchasing, subsequently refurbishing, present wind turbines while selling electricity to other businesses; construction and managing new wind turbines, promoting the ability to other businesses; and constructing new wind farms which will subsequently, as a whole, be offered to a different provider.

However Allete Clean Energy does not sell its electricity or finished wind

8 | SKILLINGS MINING REVIEW February 2019

As stated by the Department of Energy's 2017 Breeze Industry Reports, wind turbines are getting to be bigger and stronger while technology prices continue to fall. A report from November by investment firm Lazard stated electricity from wind turbines is much significantly less costly than electricity from conventional coal plants.

Selling electricity to a sister firm including Minnesota Power would produce generates added regulatory hurdles, orGeneral Counsel and Secretary and Director of Compliance Maggie Thickens stated,"you will find far more measures for this."

With these factors working in its favor, the business has increased from four to five 82 workers in below eight decades, and will now supply 540 megawatts of wind production for its clients but expects this to leap into 720 megawatts if its second two wind farms are more usable later this season.

A nationally strategy ensures that in case the wind is not blowing off in Minnesota or Iowa to a specific day, then it may be in Oregon or Pennsylvania.For stability and continuing expansion, Allete is utilizing its own electricity infrastructure and services firms -- Allete Clean Energy, U.S. Water and BNI Energy -- to supply another 20% of earnings.

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The New Hibbing Taconite Managing Partner: ArcelorMittal USA Chicago-based ArcelorMittal USA will measure up as managing partner of Hibbing Taconite Co. at Minnesota's Iron Range, that provides iron ore through lake freighters into ArcelorMittal's steel manufacturers in Northwest Indiana.

T

Hibbing Taconite Company 1976 and made 7.7 million tons of magnetite this past year . "A ssuming the he

mine started in

ore

function of managing partner reveals

ArcelorMittal's continuing dedication to H ibbing T aconite while making sure that the long - term source of

property. Considering the role of managing partner reveals ArcelorMittal's continuing dedication to Hibbing Taconite while making sure that the long-term source of superior iron ore into our key operations at the USA."

"ArcelorMittal is accountable for a substantial portfolio of raw mining and material resources around the planet, generating over 62 million tons of iron ore this past year. Including our Minorca Mine operation situated only 30 minutes inland from this Hibbing

CEO Brett will possess practical oversight of this mine when ArcelorMittal presumes its position as managing partner during the subsequent eight weeks.

superior iron ore into our crucial

the USA," ArcelorMittal USA President and CEO John Brett explained. operations in

Over the following eight weeks, the partners will work to make sure there's an orderly transition of management with the objective of preserving stability to the Hibbing's work force. Even the Hibbing Taconite Company owners, and ArcelorMittal as boss, will still continue to honor the conditions of the newly ratified labor agreement arrangement between the United Steelworkers and Hibbing Taconite Company.

"After Cliffs declared it would tender its resignation as managing partner, we understood that supposing supervision for the surgery was the ideal thing for our enterprise, the Hibbing employees along with the Iron Range community," explained John Brett, president and CEO, ArcelorMittal USA, that would have practical oversight for its Hibbing operation.

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February 2019 SKILLINGS MINING REVIEW | 9

mining industry automation

10 | SKILLINGS MINING REVIEW February 2019

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Fatality Figures in the mining industry At the very eve of the New Year, transnational mining and metallurgical company Rio Tinto, which was among the first to build its own "mine of the future", formally announced the launch of the planet's first AutoHaul autonomous long-distance railway network for the transport of iron ore into the ports of the company in the Pilbara Region in Western Australia.

A

dvisors of

Technavio forecast

the increase of the robotics market in the mining sector by

27.01percent by 2022.

At the moment, the first robot dump an average of

truck has been constructed and passed along the route of the quarry in an offline mode, while the process of

assembling and equipping the second dump truck, as well as constructing the infrastructure necessary for the functioning of autonomous machines has been completed.

Mines, which will use only robots, which is controlled by bots, are not any longer a dream. In 2019, one of the earliest of such projects may be implemented. Hopefully these changes mean putting the times of mining disasters behind us for good. A fiber-optic network will be generated through the mine, ensuring continuous contact of autonomous tractors, robot drillers and ground-based control centres.

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COMPETITIVENESS The growth of this use of robotic and automated technology in the mining industry is made possible by reducing the cost of innovative products. In Morocco, a TEREX-based mining truck with autonomous control created by the Russian company VIST Robotics (a part of Zyfra Group) has passed successful trials in a special test site.

Unmanned aerial vehicles help avoid emergency situations in the quarries, monitoring the process of explosive operations and traffic. Drones are actively used for the mining and testing of gear in hard-to-reach places.

With total global yearly work-related fatalities costing roughly 4 % of the world GDP, mining deaths price the world economy about US$33 billion in 2018. According to the McKinsey report, over the previous 30 years, the average price of a robot has fallen by

half in real terms, and even more in connection with labor costs. Cost of robots has fallen in the past 20 years.

For the first time in industrialised history, we've got the opportunity to practicably eliminate humans from hazardous circumstances, whereas previously we had been mostly restricted to improvements in work procedures.

In 2019, producers of industrial robotics will increasingly resort to global cooperation to expand the marketplace and introduce new technological options in mining.

Manufacturers of robotic gear also must pay special attention to the protection of apparatus after massive virus strikes on industrial facilities in 2018.

Competitiveness compared to fatalities from the mining industry bottom line.

Unmanned vehicles will replace the person and will independently record

February 2019 SKILLINGS MINING REVIEW | 11

MINING INDUSTRY AUTOMATION

meter readings, start looking for the damage that cannot be viewed with the naked eye and also transmit the picture in the 4K format into the operator.

Not less and possibly more important obstacle to the final transition into using robotics in mining remains the problem of employment of employees whose work has been performed from the machine.

As of 2016, the mining sector in Australia has the fifth greatest fatality rate from all industries, which is double the average work-related fatality rate. While applying only 1.9 per cent of the total Australian workforce, it's accountable for 4 % of work-related fatalities. At the same time, in the other hemisphere, Swedish technology companies, such as Ericsson, Scania, Eprioc and SKF, are joining together in the Swedish Mining Automation Group (SMAG) and are starting to advertise their own products and technology for mining companies. The report of the consulting firm BDO Australia says that by 2020, more than 50 percent of miners across the world is going to likely be replaced by robots.

A few years back, world mining leaders started a large-scale process of updating their very own fleet of equipment. Acumen Research and Consulting (ARC) estimates that the international mining equipment market will reach $285.5 billion worldwide by 2026. The provider intends to use drones to look at the status of the holds of boats prior to flights.

A number of these changes will lead to job loss, especially for semi- and unskilled employees. There will be

fewer people travelling to regional centers, which will impact local housing markets, support services and local industry. And automation will bring modifications to the mining workforce, which currently has a skills shortage of engineers.

concern. Australian mining giant BHP Billiton, famous for its busy debut of drones in to manufacturing, announced the beginning of using drones in sea cargo in the experimental mode.

It is planned that in 2019 the system will operate to the full extent.

Resolute Mining declared that its golden mine Syama in Mali will be the first in the world to become fully autonomous.

Sweden is currently among the top mining countries, and therefore SMAG began its collaboration with Canadian companies that expect in the short term to upgrade their own manufacturing and to begin utilizing the innovative technology with the support of the

There is a challenging situation, since the contradictions between effective business and societal responsibility in the coming season is only going to grow. At precisely the same time, the leading players at the robotics marketplace ought to be prepared for the

12 | SKILLINGS MINING REVIEW February 2019

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MINING TECHNOLOGY

greater rivalry and development of new businesses haven't previously worked in the mining industry. a concerted campaign of states, mining companies producers of robotics can help to find a way that satisfy all players in the business.

that Just and will

tion automation yielding a 29 per cent quarter-on-quarter reduction in injuries. A mine is similar to a giant factory, and mining businesses are attempting to automate larger parts of the factory to enhance efficiency, productivity and security.

AUTOMATION AT THE MINING INDUSTRY Australia's mining sector is termed cutting edge, together with one of the world's best security records. However, since 2003 there have been 131 deaths associated with mining.

Mining companies are currently automating tasks like ore haulage, which causes the majority of all mining-related injuries. Rio Tinto, BHP, FMG and Roy Hill in Australia are in the process of automating haulage by using autonomous trucks, automatic and drills trains, and yet one day autonomous boats.

Already now the very advanced "miners" execute a number of technological procedures, such as drilling and transport of raw materials, with the use of robotics, while in 2019 nearly all industry players may begin using new technologies on an industrial scale.

The company expects to see the first test results in the second quarter of 2019. Over the past 30 years, average robot prices have dropped by more than half relative to labor costs. And since the market grows, economies of scale will come into play.

Research by the ILO proves that a high fatality rate contributes to lower competitiveness in regards to national markets.

A few decades back, there was practically no alternative on the market of unmanned trucks, such companies as Caterpillar and Komatsu totally met the requirements of miners in autonomous transportation. It is planned that the developed product will replace a person in especially dangerous

Even some of the ‘negatives' stated above have silver linings. Fewer people travelling to regional centres puts less strain on health, home and community services, and cuts back on the ecological and social impact of a fly-in, fly-out workforce. In Kazakhstan, VIST Robotics together with the Nazarbayev University Began to work on the truck tractor based on the KAMAZ NEO truck. The organization's ten-year work on the introduction of the largest railway robot must lead to an increase in the ore generation in Pilbara from 340 million to 360 million tons.

But other people, according to a research by the Regional Social Development Centre, will probably be huge positives.

Automation means increased efficiency and security, and it attracts a decrease in operating costs. This means a more secure working environment and improved environmental monitoring. Analysts think that demand from emerging markets encourages robot manufacturers to switch to cheaper regions, and robotics will continue to drop in price. Another example is Rand gold's Kibali Gold Mine from the Congo, which is aiming to have a bottom level completely free from individuals, with underground opera-

www.skillings.net

February 2019 SKILLINGS MINING REVIEW | 13

IRON ORE

manufacturing requirements, while the price of drilling wells will remain at precisely the exact same level or even decrease.

Apart from the tragic loss of priceless life, mining deaths have a high price to company as well: Governments cannot allow unemployment to grow, even though the costs of manufacturing automation have been reduced.

19 per cent of those deaths are due to occupational accidents. Of these, the

mining industry is responsible for as many as 5 percent of global workplace fatalities, despite comprising only 1 percent of their global workforce. As of 2000 numbers, this translates into at least 15,000 mining deaths per year. To put this in perspective, this is actually the entire permanent population of Broome in Western Australia dying due to mining incidents every year.

MONETARY EFFECT Drones make 3D maps of those areas, which are then analyzed using Big Data

technologies to assess the capacity of their mine. Firms engaged in the development of unmanned aerial vehicles can also begin to increase production, as mining companies are finding new and new applications for drones.

Such predictions seem very reassuring for manufacturers of industrial robotics and at the same time impose a great responsibility on the companies that will need to develop more innovative technical solutions to fully replace people.

Nonferrous Metallic Minerals Leases Plan Expected time interval of action: January 2019 during October 2019

A

nglo G old sota

A shanti M inne (AGAM) intends to

drill exploratory borings

in

28

sites employing the rotosonic

drilling approach.

Rotosonic

drill-

ing employs high frequency vibra tion of the drill little to progress and gather cores of lands, glacial sediments, along with a brief period of their underlying bedrock .

T he

finish soon after the very surface of bedrock is struck and subsequently be permanently sealed. Some websites need frozen earth before drilling may happen.

borings will

AGAM will utilize existing public streets, country forest access roads, and other accessibility paths to get into the drill websites.

Mowing and cleaning are expected at the dull websites and a few access paths. AGAM doesn't suggest new streets or paths. Surface possession: AGAM will match with all an Itasca

County Land Department to get accessibility. Upon DNR approval, which might consist of stipulations, AGAM will be able to research as clarified in

14 | SKILLINGS MINING REVIEW February 2019

the mining program on surface lands.

AGAM will be able to research on different lands covered by state mineral leasing upon gaining entry.

www.skillings.net

Market 2019 of Cleveland-Cliffs 2.0

T

he cost of iron ore , its chief solution , was

2010 since the Chinese product boom began to wane. To make things worse, the decreasing since

former management team had made some bad choices to get questionable assets in top-of-the-market valuations.

Cleveland-Cliffs' business hardly looks like what it had been a couple of short decades back. The organization's name is different - it shifted in 2017 in Cliffs Natural Resources.

Despite these modifications, the organization's stock transactions like nothing has really changed. Long-term investors are waiting for Wall Street to grab on and get started valuing this inventory for that which it is now rather than what it was. Let us look at what exactly working in favour of and from Cleveland-Cliffs, and if the stock is a purchase now. The combo of focusing operations on its own lucrative U.S. company and cleanup the balance sheet has done wonders to your earnings statement. Direction is comfortable enough using its existing position that it is investing in expansion and contains reinstated a 0.20-per-share annualized dividend that, in present stock prices, yields 2.6 percent.

Having contracts which guarantee volume obligations and charging a small premium to reflect reduced transport costs help clarify the way the firm has churned out continuous operating profits within the last couple of decades. Regrettably, those working profits were eaten up by debt-servicing expenses. That is just another component of the company where Cleveland-Cliffs' direction has changed things much. In under five decades, the business has reduced its debt burden by over half and currently carries a significant quantity of money on the balance sheet.

Cleveland-Cliffs' inventory has been a textbook illustration.Iron ore is a comparatively affordable product on a per-ton foundation, but it's heavy, and transport costs can be important. With mines at the U.S. that create an excellent level of iron ore comparatively near facilities of need, Cleveland-Cliffs can realize higher costs per ton sold to exactly the identical ore which could come from areas like Brazil. Additionally, it suggests clients up for

www.skillings.net

yearly contracts which guarantee volumes are all constant.

Every one the items mentioned previously reveal that what is under the hood in Cleveland-Cliffs is exceptionally different from how things were prior to the new management team took on. But regardless of the motor tune-up, it is still a horrible investment on the exterior. Iron ore remains a commodity business where demand and costs are astoundingly sensitive to economic cycles. When there had been a decrease in economic outcome relatively shortly, it would not be surprising to determine Cleveland-Cliffs' sustainability decrease significantly.

The business has made amazing strides in the previous several decades, but its inventory does not appear to reflect those modifications. With lots of unprofitable companies along with a bloated balance sheet, Goncalves and present management started cleaning house.

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Together we’re engineering what’s possible and moving the world forward.

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February 2019 SKILLINGS MINING REVIEW | 15

IRON RANGE REGION

$9.9 million to Deal with Dredged "We're more than willing to continue to operate with them and to assist them in their valuable use plans for each one of the harbors," Army Corps Chief of Public Affairs Andrew Kornacki stated.

T

he projects have extended the lifetime of this interface's

30 $150

containment dikes from

years, saving the need to spend

million to build a brand new storage dike.

The Ohio EPA has decided that the sediment dredged in the Cuyahoga R iver is overly contaminated with PCBs to be thrown into Lake Erie, hence the need for containment dikes since the passage of the federal Clean Water Act in 1972.

The business cleans and dewaters the sediment, and combines the soil with fresh aggregates, trucks the material off the dike and sells it for use in construction and landscaping projects, as well as utilizing some because of its endeavors.

In Fairport Harbor, the Lake County Port Authority hasn't yet committed to some dredged soil reuse plan, but port officials have thoughts they believe will work and cost much less compared to the Lorain job.

The Por t of Cleveland teamed with the Kurtz Brothers landscaping company to construct and operate a system called a mattress load interceptor on the Cuyahoga River, which catches and removes tons of sediment from the shipping station, decreasing the need for dredging Directed by 10-15 percent. "Northern Ohio and our region would be the industrial and farming center of the United States," Kaptur said. "These investments in infrastruc-

16 | SKILLINGS MINING REVIEW February 2019

ture will fortify our commitment to creating great jobs and strengthening trade across our heartland."

On Dec. 3, the Ohio State Controlling Board released $9.9 million asked by the Department of Natural Resources for three Lake Erie port towns. The grants included $4 million into Lorain for the building of a facility designed to recycle the equivalent of 13,000 dump truck loads of sediment dredged out of the river and the harbor every year.

The project is expected to become operational by 2020, when a new Ohio law takes effect that will end the U.S. Army Corps of Engineers' clinic of open-lake dumping of 1.5 million tons annually of sediment dredged in seven harbors on the lake's southern coast. The environmental retrieval of the Black River and the Port of Lorain

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has obtained a second shot of funds to help bankroll a fresh restoration project.

The town of Conneaut in Ashtabula County received $4 million to assemble the Conneaut Creek Dredge Material Facility, which will take up to 75,000 cubic metres of dredged sediment in the Conneaut Harbor. This facility is intended to process the sediment, blend it with dirt and create potential new uses for the substance, like capping a brownfield site located adjacent to the facility. The Black River Dredge Reuse Facility will be located on a 30-acre website on the south shore of the river, about 2 miles out of its mouth on Lake Erie.

"These branches are an important step toward modernizing our Great Lakes ports and waterway infrastructure," explained U.S. Rep. Marcy Kaptur, Democrat from Toledo, and the standing member of the Appropriations Subcommittee on Energy and Water.

enough for open-lake disposal, might be applied to cap the polluted soil.

Other beneficiaries of this Healthy Lake Erie Initiative funds incorporate the Toledo-Lucas County Port Authority, that will invest $1.9 million to update its restricted disposal dike, raising its capability to contain around 1 million more cubic metres of dredged sediment annually to the subsequent 6 to 10 years. Possible franchising plans include beach nourishment and shoreline habitat restoration projects, Zahirsky stated. The Lake County port is operating together with the Ohio EPA to identify a landscaping firm prepared to make a private-public venture for a beneficial reuse deal, he said. If the

NORTH AMERICAN MARKET (LTU) Company

Public Affairs Andrew Kornacki said that his agency was working with the Ohio EPA along with different interface authorities to devise plans for meeting the needs of the law. The Black River reuse project comes after $35 million is already spent on environmental jobs in the region. The latest was in 2015 when $15 million in Great Lakes Restoration Initiative funds had been spent to eliminate 24 acres of polluted sediment from the Dark River floodplain, the legacy of decades of steelmaking and shipbuilding operations on the property.

"Our substance is already fairly clean, coming out of the Grand River," explained Peter Zahirsky, manager of Coastal Development for the port authority. The Dark River Dredge Reuse Facility is intended to recycle the equivalent of 13,000 dump truck loads of sediment dredged from the river and the sanctuary every year. An additional $3.5 million will be spent to fix Cleveland's breakwater second year, Kornacki said.

IRON ORE PRICE REPORT

Ore Type

Pellets, FOB Michigan Mines Pellets, FOB Cleveland-Cliffs Inc. Minnesota Upper Lakes Port Source: CLEVELAND-CLIFFS INC. Cleveland-Cliffs Inc.

other ports are searching for methods to reuse dredged sediment they need only to watch the Port of Cleveland's surgery, which has recycled an average of 140,000 to 160,000 cubic metres of sediment for the last five years, said president Jade Davis.

Per Iron Unit

Per Gross Ton at 64%

Per Ton at 64% Reporting Date

$1.28

$81.92

12/31/17

$1.42

$90.88

12/31/17

The Black River centre will be situated adjacent to a large industrial brownfield in which an estimated 30 years' worth of dredged sediment, formerly determined to be clean

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February 2019 SKILLINGS MINING REVIEW | 17

IRON RANGE REGION

IRRR Board approves rebates and infrastructure grants Ten new jobs would be created.

Northeastern Minnesota's six iron ore producers are getting $8.4 million in residues in the Minnesota Department of Iron Range Resources and Rehabilitation for capital development projects at taconite plants. $300,000 to the city of Two Harbors for its 2.4 million building of a brand new performing arts center.

TEDF jobs approved are: 1 new job will be generated.

• $225,000 into the city of Iron Junction to get a 305,750 municipal water system upgrade.

• $ 220,000 into Breitung Township toward a 1.15 million project to

develop a city hall/community center at the prior Breitung fire hall and garage.

• $250,000 into Silver Bay to encourage a $1.8 million growth of a 49-unit civic campground along the North Shore.

• $110,000 to Virginia for a $2 million reconstruction of Midway Drive.

• $ 558,062 into Keetac toward a minimum $550,000 tails container reclamation and dust management

18 | SKILLINGS MINING REVIEW February 2019

project along with a minimum $950,000 lineup 3 primary screening update.

• $250,000 into the city of Calumet for $3.1 million in infrastructure improvements to roads.

Fourteen grants totaling $3,072,000 were accepted by the Community Infrastructure Grant program to assist communities within the bureau's support area with infrastructure improvement projects which encourage community growth.

• $ 1,936,497 to Hibbing Taconite

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M i n i n g C o . t owa r d a m i n i m a l $4,100,00 mill gear and pinion replacement undertaking.

• $ 250,000 to the city of Babbitt to assist with infrastructure development at a new $2.7 million, also 22-acre Birch Lake Recreation area campground.

• $159,000 to the city of Mountain Iron/ Mountain Iron Economic Development Authority to assist with expanding of a healthcare business.

The Iron Range Resources and Rehabilitation Board (IRRRB), that considers projects advocated by the agency's commissioner, accepted the funding Monday in a board meeting in IRRRB headquarters at Eveleth.

• $690,864 into ArcelorMittal Minorca toward a minimum of 2,019,639 multiclone replacement project.

• $3,176,057 to Minntac Mine toward two projects totaling a minimum of $6,352,114. Projects incorporate

new Measure I & II cleaner magnetic separators, a mine expansion into the south, Line 4 indurating control system, agglomerator Step I recover pump, primary crusher #3 slope doorways, tailings basin seeding and mulching, concentrator classifier and boiler management updates, and angle troughers on conveyor belts which carry taconite from the most important crushers into the nice crusher.

• $835,855 into United Taconite toward a minimum $8,132,000 Mustang Fluxstone Handling System job.

• A 90,000 property and $165,000 gear loan to Airmark, Inc., of Cohasset, to help the wooden shim producer expands its own facilities and production capacity. Three new jobs could be created.

• $ 70,000 to Cook County/Grand Marais Economic Development Authority toward a $143,000 project to update infrastructure to permit

expansion of this county's only child maintenance facility.

The board also approved: • $250,000 to the town of Ely toward $1.7 million in sewer, water and road improvements on West Camp and Pattison streets.

• $1,232,195 into Northshore Mining Co. toward a minimal $9,907,000 job to install a new heating system steam production facility.

The cash comes from the agency's Taconite Economic Development Fund (TEDF), which refunds a portion of the taconite production tax covered by the mining companies. Each firm must match the award amount.

• $250,000 into the city of Cohasset to develop a $2.2 million community centre that will consist of new child care choices and a senior center.

• $ 250,000 to the town of Gilbert toward stage II of a brand new $12 million wastewater centre.

Community Infrastructure grants are: • $150,000 into the city of Deerwood to get a $1.1 million project to demolish the existing water tower, growth of a new tower and replacing undersized water lines in the city.

We thrive on challenges golder.com

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February 2019 SKILLINGS MINING REVIEW | 19

IRON ORE

Vale Iron Ore Quality

I

n India, an increasing number of iron ore is arriving to the country for mixing and utilize in pellets,

Vale

Vale

explained.

has tolling agreements in India and

Middle East with pellet plants,'' the company said. in the

In southern Brazil, the acquisition of Ferrous Resources, which Vale says has iron ore concentrate sources with qualities enabling production of more demanding direct reduction pellets, is still also part of a plan to boost its high quality solutions.In Vargem Grande, Vale will tap ultra-fine iron ore in just two years with processing improvements.

The company is also investing in optimizing dry processing to extract higher quality ores.

The $130 million expansion will allow the heart to tap new customers from India and Southeast Asia, Vale stated. In Oman, a $30 million project to add two million mt/year of pellet capacity beginning in the next half of 2020 at its current site in Sohar has been projected. The Brazilian miner intends to expand the capacity of its Malaysian iron ore distribution and mixing facility by 10 million mt/year to 40 million mt/year from 2022, to allow for more blending and earnings into new markets.

Vale will expand its liter feed provides to outside crops, with more volumes starting in 2020,'' Peter Poppinga, Vale's executive officer such as ferrous minerals and coal, said in the event in London.

Minnesota Department of Natural Resources- Sarah Strommen

S

trommen did not immediately provide you an opinion about the planned

Twin Metals mining job Thursday and stated she'd review this, if it has to do with her office, as she'd with other people. Sarah Strommen has been appointed the nation's top all-natural source official Thursday by recently chosen DFL Gov. Tim Walz. Strommen was commended by conservation team leaders, such as Joe Duggan, former vice president of business relations in Pheasants Forever.

She had been chosen by Walz two other finalists: Tom Landwehr, also the present DNR commissioner, also Keith Parker, the present central branch manager for the DNR. Since 2015 she's functioned as assistant commissioner for the branches of Fish and Wildlife and Parks and Trails in DNR."Having a profound admiration for Minnesota's natural and wildlife lands, Sarah brings expertise, integrity and passion into the Department of Natural Resources," Duggan said. "As a sportsman and lifelong member of Pheasants Forever, I understand firsthand the value of this bureau and also being a part of our property," Walz said in an declaration. "Sarah Strommen assembled her career incorporating science and policymaking throughout businesses, and includes a profound understanding and appreciation for our natural resources. She adopts our vision One Minnesota and can work to construct consensus among taxpayers and stakeholders equally."

Vale said it will spend $820 million over five decades ago, and pellet feed output signal in southern Brazil has been set to rise from an additional two million mt in 2020 using incremental steps in 2021-2023 to 20 million mt longer term as part of their initiative to change to higher quality ores.

Strommen formerly served as policy director at the Friends of the Boundary Waters Wilderness, a stage which should place nicely with environmental and conservation groups throughout the nation but less with Iron Range mining fans as the continuing struggle continues over potential copper mining close to the national wilderness the DNR is going to be requested to issue licenses for. "We shall look at any given regulatory job which arrives in front of us" Strommen explained. "I am dedicated to ensuring that we have strong people engagement and then there is data and science that is going to push this.""Minnesota has a solid exterior heritage, and I am eager to work with employees, stakeholders, along with also regular Minnesotans to boost our varied and first-rate outside experiences for everybody," Strommen said in an declaration.

20 | SKILLINGS MINING REVIEW February 2019

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ADVERTISING INDEX

MINING INDUSTRY PEOPLE GoldMining Inc. announced the appointment of Dr. Ken Wang to its advisory board.

Dr. Wang is a former Managing Director and the Head of Natural Resources for both

Azcon..........................................20

Royal Bank of Canada's Asia Investment Banking and Bank of China's Global Invest-

Barr Engineering.........................17

ment Banking operations based out of Hong Kong and Beijing. Over the past 20 years,

Fryberger....................................13

he has been at the forefront of the global mining industry, intimately involved in the successful completion of more than $100 billion of investment banking transactions

Global Minerals Engineering.....20

in mining and other sectors.

Golder Associates......................15

Titan Mining Corporation announced the closing of a senior secured credit facility

Hallett Dock Company...............05

with the Bank of Nova Scotia, and the appointment of Naomi Johnson as Vice President, Community Relations. Naomi Johnson joined Titan in April 2018 and is a global community relations executive, international development specialist and lawyer with 15 years of management experience in leadership positions across the

Lake Superior Chapter ISEE.......20 Malton Electric Company..........21

private, public and not-for-profit sectors. Ms. Johnson brings a broad perspective to

walcot water...............................10

the development of sustainable and leading-edge approaches to stakeholder impact

Mielke Electric Works.................09

and risk management at Titan.

Minnesota Power.......................11

African Gold Group Inc. appointed Malcolm Campbell as President and Chief Operating Officer and Andrew Cheatle as Vice President. Mr. Campbell is a Professional

Naylor Pipe.................................24

Certified Mining Engineer with over 30 years of extensive exploration and mining

NBC.............................................20

project experience across Africa. Mr. Cheatle is a mining industry executive and

Neo Solutions.............................21

professional geoscientist with over 25 years of domestic and international experience encompassing both the senior and junior mining sectors. ď Ž

Northern Engine & Supply.........21 RMS............................................13 SEH.............................................22

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February 2019 SKILLINGS MINING REVIEW | 21

STATISTICS

March 2018 Crude Steel Production

By John Edward, Associate Publisher

W

steel, up by 1.0% on March 2017. France produced 1.4 Mt of crude steel, up by 1.5% compared to March 2017. Spain

orld crude steel produc-

quarter of 2017. North America’s crude

produced 1.3 Mt of crude steel, down by

64 countries reporting to the World Steel Association (worldsteel) was 148.3 million tonnes (Mt) in March 2018, a 4.0% increase compared to M arch 2017. W orld crude steel production was 426.6 Mt in the first three months of 2018, up by 4.1%

steel production in the first three months

4.1% on March 2017. Turkey’s crude steel

of 2018 was 29.5 Mt, an increase of 1.9%

production for March 2018 was 3.4 Mt, up

compared to the first quarter of 2017.

by 7.6% on March 2017. The US produced

to the same period in 2017.

tion for the

compared

7.3 Mt of crude steel in March 2018, an China’s crude steel production for

increase of 5.3% compared to March 2017.

March 2018 was 74.0 Mt, an increase

Brazil’s crude steel production for March

of 4.5% compared to March 2017. India

2018 was 3.1 Mt, up by 7.6% on March

produced 9.2 Mt of crude steel in March

2017. The crude steel capacity utilisation

2018, up 5.3% on March 2017. Japan

ratio of the 64 countries in March 2018 was

produced 9.1 Mt of crude steel in March

74.5%. This is 2.2 percentage points higher

Asia produced 294.1 Mt of c rude

2018, an increase of 2.2% compared to

steel, an increase of 4.6% over the first

March 2017. South Korea’s crude steel

than March 2017. Compared to February 2018, it is 0.9 percentage points higher.

quarter of 2017. The EU produced 43.1

production was 6.1 Mt in March 2018,

Mt of crude steel in the first quarter of

an increase of 4.7% on March 2017. In

2018, up by 0.9% compared to the same

the EU, Italy produced 2.3 Mt of crude

Statistics based on World Steel Association Report released on April 25, 2018. 

Preliminary USGS Iron Ore Statistics for November 2017

By John Edward, Associate Publisher

A

U.S. G eological S urvey (USGS) report by Mineral Commodity Specialist Christopher A. Tuck, U.S. mine production and shipments of iron ore in November 2017 were 4.47 million metric tons (Mt) and 4.33 Mt respectively.

Average daily production of iron ore was 149,000 metric tons (t), 7% greater than that of October and ccording to the

27 % greater than that of November 2016.

Average daily shipments of iron ore were 144,000 t, slightly less than those in October and 3% greater than those in November 2016. Mine stocks at the end of November 2017 were slightly greater than those held at the end of October 2017 and slightly less than those held at the end of November 2016. U.S. exports of iron ore totaled 943,000 t in November 2017, 9% less than those in October 2017 and 27% less than those in November 2016. U.S. imports of iron ore totaled 320,000 t in November 2017, 45% greater than those in October and 11% greater than those in November 2016. 

22 | SKILLINGS MINING REVIEW February 2019

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CRUDE STEEL PRODUCTION, MARCH 2018. Source – World Steel Association MARCH 2017

% CHANGE MARCH – 18/17

1,030 e

1,175

4.7

20 e

15 e

16

25.0

El Salvador

10 e

5e

8

Guatemala

25e

25 e

1,750 e

MARCH 2018

FEB 2018

1,230 e

Cuba

MARCH 2018

% CHANGE MARCH – 18/17

13,354

15,038

0.5

Total - Other Europe

3,645

3,290

3,425

6.4

33.3

Total - C.I.S. (6)

8,101

7,675

8,621

-6.0

22

12.6

Total (64 countries)

148,330 131,791 142,681

4.0

1,535 e

1,701

2.9

-

-

-

-

7,261

6,446

6,894

5.3

e – estimate | r – revised Monthly Crude Steel Production in the 67 Countries included in the report, in thousands of metric tons. The 67 countries included in this table accounted for approximately 99% of total world crude steel production in 2017.

10,296

9,056

9,816

4.9

U.S. RAW STEEL PRODUCTION

474

417

392

20.8

Brazil

3,065

2,714

2,848

7.6

Chile

110 e

85 e

109

0.7

Colombia

125 e

90 e

117

7.0

Capability Utilization Rate

Production

MARCH 2017

15,111

Ecuador

55 e

45 e

46

19.6

April 28, 2017

1,754

-1.9

74.8

29,723

1.6

75.5

Paraguay

1e

2e

1

66.7

Previous Year

1,721

1.9

73.8

29,252

-

74.4

115 e

100 e

104

10.4

April 21, 2017

1,788

0.2

76.3

27,969

5e

5e

4

25.0

1.6

75.6

40 e

25 e

49

-17.9

Previous Year

1,721

3.9

73.8

27,531

-

74.4

Total - South America

3,990

3,483

3,669

8.7

April 14, 2017

1,784

- 1.2

76.1

26,181

1.4

75.5

Egypt

650 e

583

528

23.1

Previous Year

1,721

3.7

73.8

25,810

-

74.4

Libya

30

48

49

-39.3

April 7, 2017

1,805

1.6

77.0

24,397

1.3

75.5

-

-

-

-

Previous Year

1,721

4.9

73.8

24,089

-

74.4

South Africa

527 e

491 e

545

-3.1

Total - Africa

1,207

1,122

1,122

7.6

2,350 e

2,120 e

1,635

43.7

239

152

240

-0.4

Saudi Arabia (HADEED only)

425 e

385

376

13.0

Total - Middle East

3,262

2,859

2,534

28.7

73,980 64,930 e

70,800

4.5

Mexico Trinidad and Tobago United States Total - North America Argentina

Peru Uruguay Venezuela

Morocco

Iran Qatar

China

207

214

213

218

4.7

Great Lakes

657

667

685

683

2,000

0.0

Midwest

163

165

159

166

90,475

97,979

4.3

Southern

652

666

653

660

482

90,475

429

12.3

Western

75

76

74

78

47

52

47

0.5

1,754

1,788

1,784

1,805

529

477

476

11.1

Japan

9,082

8,296

8,888

2.2

South Korea

6,095

5,415

5,823

2,000 e

1,810 e

102,190

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WEEK ENDING

North East

5.3

Total - Oceania

DISTRICT

4/7

8,764

New Zealand

WEEKLY U.S. RAW STEEL PRODUCTION BY DISTRICT 4/14

8,434

Australia

In thousands of Net Tons – Source - American Iron and Steel Institute * Percent Change is a comparison between a given week and the previous week.

The % change figure in the previous year row refers to the change from a given week compared with the corresponding week of the previous year.

AISI’s estimates are based on reports from companies representing about 50% of the Industry’s Raw Steel Capability and include revisions for previous months.

4/21

9,227

Total - Asia

WEEK ENDING

Year-to-Date Production

4/28

India

Taiwan, China

Weekly Production

Percent Change*

Canada

Total - European Union (28)

FEB 2018

Percent Change*

COUNTRY

Production

COUNTRY

Total

In thousands of Net Tons – Source – American Iron & Steel Institute.

February 2019 SKILLINGS MINING REVIEW | 23