JOHANNESBURG (miningweekly.com) – Although the global iron-ore market continues to demonstrate better-than-expected fundamentals from a demand perspective, particularly in relation to pricing for higher-quality products, Aim-listed Zanaga Iron Ore remains concerned about the continuing build-up in Chinese iron-ore port stocks.
In the company’s half-year report for the six months to June 30, published on Friday, chairperson Clifford Elphick said higher Chinese iron-ore port stocks may have a negative effect on iron-ore pricing through the end of the year if Chinese steel mill consumption slows.
Further, the company expects substantial production expansions to enter the market in the second half of the year, with only a small number of these being replacement projects for mines entering the final phases of their lives.
Zanaga stated that guidance from the major iron-ore producers indicated that new supply would continue to result in a net overall increase in global seaborne iron-ore supply.
“This should result in a reduction in benchmark iron-ore prices, but we do not expect a significant contraction of the attractive price premiums being achieved by high-quality products,” the company said.
Zanaga continues to mull options to develop its Zanaga iron-ore project, in the Republic of Congo.
“The project team is actively investigating the potential for the early development of a small-scale, low capital expenditure, low operational expenditure project using road and potentially rail transportation solutions, as well as existing port infrastructure. We intend to be in a position to provide more detail on the outcomes of this study work by the end of this year," said Elphick.