Business
Black Iron: Spike in Iron Ore Prices Supports Economics of Shymanivske Project
Iron ore prices up ~25% YTD with 65% iron content product currently selling for US$106/tonn...
About this update from Black Iron Inc.
[{"type":"text","content":"Black Iron: Spike in Iron Ore Prices Supports Economics of Shymanivske ProjectIron ore prices up ~25% YTD with 65% iron content product currently selling for US$106/tonne as of February 12, 2019; Black Iron plans to produce a 68% iron content productLicense revocation and production cuts at the world's largest iron ore producer contributed to upward price trends in the iron ore marketPellets and pellet feed, as planned to be produced by Black Iron, are expected to receive the most sustainable positive price impactThese market developments further bolster Black Iron's strong project economicsToronto, Ontario--(Newsfile Corp. - February 14, 2019) -  Black Iron Inc. (TSX: BKI) (OTC: BKIRF) (FSE: BIN) (\"Black Iron\") reaffirms the economic projections for its Shymanivske project, citing a weeks-long surge in iron ore prices after one of the world's largest iron ore producers took 11 mines offline, significantly crimping supply. On January 25, 2019, one of Vale's mines in Brazil experienced a disastrous tailings dam failure, causing the producer to voluntarily shut ten of its iron ore mines (~40Mtpa production) to minimize the risk of additional upstream tailings dam failure. On February 4, 2019, as reported by several news outlets, regulatory authorities in Brazil ordered Vale to shut its second-largest iron ore mine, taking an additional 30Mtpa of production offline and causing Vale to claim force majeure on its ability to supply iron ore to some of its customers. The shut-down of Vale's mines resulted in a combined production loss of 70Mtpa, representing ~6% of global consumption. In response, iron ore prices spiked to the current US$87/T for benchmark 62% iron content fines and US$106/T for 65% iron content fines. While analysts have mixed projections on how long the iron content benchmark price will stay at elevated levels, there is consensus that prices of iron content products - more specifically iron ore pellets - will increase for at least the next few years as the industry responds to lower supply. As a result, premium 68% iron pellet feed product, as planned to be produced by Black Iron, is expected to sell for a significantly higher price than benchmark iron ore for at least the next two to three years. Shymanivske Project Economics Producing high grade iron ore (i.e. >65% iron) and pellets requires substantial i...