Rio Tinto has no plans to improve the grade of its iron ore, despite steps in that direction from major Brazilian competitor Vale.
While conversation in Australia has focused on the widening gap between the price China will pay for 62% iron ore, and the 58% grade produced by Fortescue Metals Group, there has reportedly developed a premium market for iron ore of 64% grade and beyond.
Vale’s average iron grade in the June 2017 quarter was 63.8%, and that rose to 64.1% in the September quarter, and again to 64.3% in the December quarter.
According to a Fairfax report, a spokesperson for the company has said the grade increased will continue as the miner’s giant S11D project continues to come online.
“The average iron ore grade should continue to rise while the production from S11D continues to increase,” the spokesperson was quoted as saying.
“One of the main driving factors behind this increase is S11D’s ramp-up, which should be completed in 2020.”
Rio boss Jean-Sebastien Jacques reportedly told Fairfax the company had no plans to increase the average grade of its Pilbara Blend, despite this.
“We are very comfortable with the blend we have at this point in time, the Pilbara Blend, because it is the reference product in China,” Jacques was quoted as saying, “we don’t intend to change the blend.”