Iron and iron ore have been associated with human development and progress since time immemorial. Iron and steel were necessary components in the industrial revolution, which began in the middle of the 1600s. Already from the beginning, the Dannemora ore played an important role in Europe's emerging steel industry.
Iron ore products from the reopened Dannemora mine
Dannemora Magnetit is planning for an annual mining rate of 2.5 million tonnes of crude ore with an average iron content of 35.3 percent in the Dannemora mine. At full production, the processing plant is expected to produce 1.5 million tonnes of finished products, consisting of 60 percent lump ore (grain size 5-16 mm) grading 50 percent iron and the remainder fines (grain size <5 mm) grading 55 percent iron.
The products are sold to steel mills which transform the crude ore into pure iron in a blast furnace. Lump ore can be fed directly into the furnace, as its grain size, between 5 and 16 mm, allows
oxygen to circulate around the raw material in the furnace, thereby achieving an efficient melting of the iron. The grain size of fines is too fine to create a uniform aeration of the raw material in the furnace. The steel mill therefore takes the fines products to a sintering plant where the grain size is increased before the material goes to the blast furnace.
After the 2008-2009 global financial crisis, 2010 saw the start of a return to more normal economic conditions, and global steel production reached a new production high of 1,440 million tonnes in 2011. The outlook for 2012 is on the whole encouraging, with production in the first
quarter 1.5% higher than the same period the previous year. The Asian tigers China and India continue to be the drivers in the global economy The economic crisis in southern Europe is
still of concern, while activity in northern Europe appears better. The U.S. has begun to gain momentum, with the continuing low interest rate policy being a contributory factor.
Improved prices and a continuing rise in production were expected for steel during 2011. Chinese steel production, which increased slightly in the fourth quarter of 2011, is expected to achieve a
normal rate of growth after the Chinese new year and 2012 is expected to be another record year, both for China and the rest of the world.
Since the second quarter of 2010, the previous pricing system using annual benchmarks has been replaced by a complex market of annual prices, quarterly prices, monthly prices and spot prices, for which the reference is the listings for spot ore deliveries to Chinese ports. The trend continues, and in 2012 at least two iron ore trading platforms (CMBX and Global Ore) are being introduced, one Chinese and the other more independent but with a leaning towards suppliers. This could mean a new and more transparent system for spot transactions, which in turn should provide a better basis for the index, which currently serves as the base for the global pricing.
Prices have remained relatively stable in 2012, and most analysts do not expect any dramatic price changes during the year.
The iron ore industry faces the future with optimism. In most cases, the capacities that will meet the strong demand for iron ore and which are expected to come into production within a few years are no longer based on existing structures, but on new deposits in new locations, with a considerably longer period between project start and delivery, and with a much higher cost structure.
Today the company has supply contracts with Salzgitter Flachstahl, ThyssenKrupp and Stemcor. This means we have now signed contracts for up to 80 percent of our production at full operation, and we expect to have a market for our entire iron ore production during the present year.
Dannemora Magnetit AB
182 16 Danderyd
Fax +46(0)8-753 4390