Iron: The Core of the Developing World

VISUAL CAPITALIST IRON HE CORE OF THE DEVELOPING WORLD IRON MAKES UP A HUGE PART OF OUR PLANET AND THE NATURAL WORLD. → 80% OF EARTH'S CORE 4TH MOST COMMON ELEMENT IN THE CRUST AS A RESULT, IT WAS ONE OF THE FIRST METALS TO BE DISCOVERED BY MAN. IRON WAS USED DIRECTLY IN WEAPONS AND TOOLS FOR 3000 YEARS, UNTIL IT WAS FOUND THAT IRON COULD BE CHEAPLY PROCESSED INTO STEEL. 98% OF IRON IS USED IN STEEL PRODUCTION. STEEL CHANGED HISTORY FOREVER, AS IT ENABLES... INFRASTRUCTURE MODERN ARCHITECTURE THE AUTOMOBILE IRON IS NOW THE SECOND LARGEST COMMODITY MARKET AFTER OIL, AND 95% OF ALL METAL PRODUCED PER YEAR IS IRON. 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fe IN 2011, THE WORLD IRON MARKET WAS WORTH US$512 BILLION IF THE IRON INDUSTRY WAS A COUNTRY IT WOULD HAVE THE 24TH LARGEST GDP IN THE WORLD. (SORRY NORWAY) IRON ORE IRON ORE IS DEFINED AS ANY ROCK FROM WHICH IRON CAN BE PROFITABLY EXTRACTED. 01. SIZE IN METRIC TONNES 02. INFRASTRUCTURE ACCESS TO TRANSPORTATION AND POWER GENERATION FACTORS THAT DETERMINE THE 03 GRADE VALUE OF AN ORE DEPOSIT: THE % OF THE ORE THAT IS IRON 04. TYPE OF IRON OXIDE PRESENT Fe,0, MAGNETITE HEMATITE Fe,03 CAN OCCUR AT VARIOUS GRADES DEPOSITS GENERALLY HAVE IRON GRADES BETWEEN LOW GRADE HIGH GRADE 20-30% APPROX. 30% IRON 55% - 65% IRON THESE ORES ARE PROCESSED INTO AN IRON ORE CONCENTRATE OF APPROXIMATELY 65% IRON, WHICH KNOWN AS DIRECT SHIPPING ORE (DSO), THIS ORE CAN BE SHIPPED DIRECTLY TO STEEL PRODUCERS ARE ONLY THEN USABLE BY STEEL PRODUCERS. WITH VIRTUALLY NO PROCESSING. DSO IS THEREFORE CHEAPER, BUT HEMATITE SUPPLY IS RUNNING LOW. MINING OPERATIONS WORLD WIDE ARE SHIFTING TO THE MORE AVAILABLE MAGNETITE DEPOSITS. THE INDUSTRIALIZATION OF CHINA AND UNPRECEDENTED DEMAND D CHINA ACCOUNTS FOR ALMOST ALL GROWTH IN STEEL DEMAND SINCE 2000 D CHINA STEEL DEMAND BY SECTOR (2010) 1200 53% 1000 • China ● non-China 800 600 47% 400 200 CONSTRUCTION OTHER INFRASTRUCTURE & MACHINERY 1980 1985 1990 1995 2000 2005 2010 CHINA HAS NOW DEPLETED MOST OF ITS OWN HIGH-GRADE IRON DEPOSITS AND RELIES HEAVILY ON IMPORTS TO FUEL ITS INDUSTRIALIZATION. D ANNUAL CHINESE CONSUMPTION OF IRON ORE = 100M TONNES 2005 2010 2015 (est) IMPORTS 550 M TONNES 1050M TONNES 1300M TONNES DOMESTIC 225M TONNES 390M TONNES 250M TONNES IRON SUPPLY CHINA'S DEPENDENCE ON IMPORTS HAS DRIVEN DEMAND HIGHER THAN SUPPLY. D IRON EXPORTS BY COUNTRY 1500 Rest of World West Africa India South Africa 1000 Brazil - Austrailia Total Imports Demanded 500 2008 2009 2010 2011 2012 2013 2014 2015 THIS IS PUSHING EXPLORATION INTO UNTAPPED REGIONS. FOR EXAMPLE CANADA'S IRON INDUSTRY IS EXPERIENCING LARGE GROWTH. DEVELOPED INFRASTRUCTURE SKILLED LABOUR CHEAP POWER POLITICAL STABILITY AS A RESULT $15,000,000,000 INVESTED IN THE CANADIAN IRON INDUSTRY. (2011) IRON PRICING AS CHINA'S IRON FALLS IN QUALITY AND INCREASES IN SCARCITY, IT BECOMES MORE EXPENSIVE. 60 200 180 160 Grade of Chinese Iron 140 40 World Price 120 100 30 CHINA CONSUMES SO 80 MUCH IRON THAT GLOBAL PRICES HAVE 60 SEEN RECENT 40 10 INCREASES 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 RON 290% PRICES SINCE 2005: GOLD 247% AS OF SEPTEMBER, 2012 - - - - - - - - - - - MANY OF THE WORLD'S IRON DEPOSITS EXCEED 1 BILLION TONNES. AT TODAY'S PRICES, THAT'S WORTH MORE THAN 61 MILLION OUNCES OF GOLD. EQUAL IN VALUE TO THE COMBINED GOLD RESERVES OF RUSSIA AND CHINA. RESEARCH HAS SHOWN THAT CHINESE STEEL DEMAND IS HIGHLY CORRELATED TO CHINA'S INCOME PER CAPITA GROWTH. OUTLOOK THE AVERAGE AMERICAN PAYCHEQUE IS STILL 10X LARGER THAN ITS CHINESE COUNTERPART. BUT CHINA IS CATCHING UP. IRON IS AN ESSENTIAL RESOURCE FOR CONCLUSION DEVELOPING NATIONS TO BUILD INFRASTRUCTURE AND INDUSTRIALIZE. HIGH LEVELS OF IMPORTS BY CHINESE MARKETS AND CONSTRAINED SUPPLY CONTINUE TO DRIVE DEMAND FOR NEW IRON RESOURCES. VISUAL CAPITALIST IS COMMITTED TO PROVIDING INDEPENDENTLY Rogue Iron Ore RESEARCHED CONTENT FOR EDUCATIONAL PURPOSES. THANKS TO ROGUE IRON ORE FOR COVERING THE PRODUCTION COSTS OF TSX-V: RRS THIS PROJECT. LEARN ABOUT THEIR IRON PROJECTS AT ROGUEIRON.COM VISUAL CAPITALIST Educating a new generation of investors on resource investing and management VISUAL CAPITALIST www.visualcapitalist.com TOP 5 SOURCES: A CHINA CENTRIC GLOBAL IRON ORE MARKET: WWW.CENTURYIRON.COM/SITES/DEFAULT/FILES/CIM_-_CENTURY_GLOBAL_PPT_200511_250511.PDF CANADIAN MINERALS YEARBOOK: WWW.NRCAN.GC.CA/MINERALS-METALS/BUSINESS-MARKET/CANADIAN-MINERALS-YEARBOOK/2009-REVIEW/3905 DEVELOPING ECONOMIES: WWW.AMEBC.CA/DOCUMENTS/ROUNDUP/2012/TECHNICAL%20SESSIONS/PRESENTATIONS/THURS%20DEVELOPING%20ECONOMIES%20-%20CENTURY%20IRON.PDF FUTURE DEVELOPMENT AND SUPPLY CHALLENGES FOR THE IRON ORE SECTOR: WWW.RIOTINTO.COM/DOCUMENTS/MEDIA-SPEECHES/RT_COMMODITIESWEEKEF_50CT 10.PDF IRON ORE: MARKET OUTLOOK AND PERSPECTIVES TO 2015: WWW.WOODMACRESEARCH.COM/CGI-BIN/WMPROD/PORTAL/ENERGY/HIGHLIGHTSDETAIL.JSP?0ID=3051940 FOR A COMPLETE LIST OF SOURCES, PLEASE VISIT: VISUALCAPITALIST.COM/SOURCES 62% Fe CIF US$/t(TIANJIN PORT) ( MILLION TONNES ) ( MILLION TONNES) AVG. GRADE OF CHINESE IRON (%)