Iron Ore - Dissertation Example

? Iron Ore & Iron Ore Introduction Iron ore often are minerals or sometimes rocks from which the extraction of metallic iron is carried out. These ores normally are rich in iron oxides and have a variety of colors. These colors range from bright yellow, grey, deep purple or sometimes rusty red. This iron is in the form of hematite, limonite, magnetite and siderite. Natural ores are usually ores carrying extremely high quantities of hematite or sometimes magnetite. The main reason for this is its usability in blast furnaces making iron. However, most of the reserves that harbor such natural ores have now been depleted. Pig iron is made out of iron ore. This pig iron is one of the main raw materials used in the making of steel. Iron ore is believed to contribute more to the global economy than any other commodity in the world. Hematite is the main iron ore in the Brazilian miles (Axinn 2006). In the global world, metallic world is virtually unknown. It is the fourth most abundant element in the world, though, silicate or carbonate minerals are the vastest minerals. Formidable and extremely energy intensive barriers often are used to separate supremely pure iron from other minerals (David 2006). Before the industrial revolution, most of the iron used was obtained from goethite, which was widely available. Societies during the pre historic times used laterite as the main source of ore. Most of the iron ore used by the emergent industrialized societies was obtained from haematite. These deposits are often called the natural ores. The increased iron ore demands in conjunction with the depletion of the most high quality haematite in the United States of America led to development of low quality sources of iron. This happened especially after Second World War. These lower sources of iron require beneficiation to improve on their quality. Magnetite on the other hand, is used due to its magnetic properties. Therefore, it is able to be separated easily from other minerals and was able to produce high quality concentrate with minimal impurities. The mining of these iron ores vary considerably with the type of ore that is being mined. Currently, there are four types of ores of iron being worked on. The business of mining ore is often a low margin one due to the significant low level of iron than other base metals. It is expensive to mine, meaning it is extremely capital intensive. It requires a heavy investment in infrastructure such as rail transport in order to transport the ore from the mining sites to the freight ship. Therefore, mining of ore is concentrated among the majority few. The world leading and largest iron producer is Brazil. This mining corporation is referred to as vale. Other developed countries follow the line due to the high costs involved in the mining and transportation of the ore. My research question arises from my curiosity to find out how iron ore is produced, consumed and distributed in the global market. This is because I understand that the cost involved in its mining process and transportation is quite high. Therefore, I would like to find out how extreme the ore is mined and the processes used in the mining process (Edward 2007). Executive Summary This research is concerned with the production, consumption and distribution of iron ore globally. In other words, it seeks to show candidly the cycle of iron ores from its mining and separation from impurities until the moment it is processed and distributed to the global market for various uses. The research shows all the methods used in extraction of these iron ores and how it is separated from other metallic substances or impurities. It also reveals research rationale that is used in carrying out my research. In addition, this research paper has addressed my research question based on the prevailing international market and all the key findings that emerge (Institute 1997). Moreover, the methodology I use to address the research question is emergent in the research paper. The paper also looks into details the most appropriate approach, strategy, data sources and an appropriate working timetable that I will use in carrying out my research. This research is on the trend of the consumption, production and distribution of iron ore in the global market (Institute 1997). The research question that emerges here is how competitive is iron and all its constituent properties competitive in the international market compared to other metal products. In addition, what can be formulated to minimize the current cost of production of these ores, thus enabling many countries including the developing ones to afford its mining without much struggle. This research rationale is extremely crucial in revealing a lot of information about iron ore and its constituents that was previously unknown. This rationale also lets the public aware of the methodology used in the production of iron ore and how one is able to separate it from other impurities or metals. Moreover, it reveals which countries are more experienced and involved in the mining process (Jupp 2006). This is crucial because if one is in need of iron in wholesale trade, one has ample information about its location. Therefore, one can make arrangements of exporting it from those countries. One of the main objectives is to reveal the consumption level or the trend of consumption of iron ore. Secondly, it has an objective of showing the rate of production of the ores, methodology used and in some cases the costs used in the production process. The third and the last objective is the distribution of the ore in the international market. How competitive is the ore in relation to other metal products. Literature Review Iron is the most widely used metal globally often known as steel in which iron or is the main raw materials. Iron represents more than ninety-five per cent of all metals used annually. It is often used in the applications of structural engineering, automobiles, maritime purpose and in machinery. Rocks that are often rich in iron are common worldwide. However, the commercial operation for the manufacturing of quality-graded ore is limited to few countries. The economic pressure facing iron ore is not necessarily due to its grain size because enough of the deposits occur and can be proved geologically (Luttenberg 2009). However, the main economic pressure arise from how treasured the ore is in the market, the infrastructure mostly railway required to transport the ores and the levels of energy required in the production process. The process of mining ore is necessarily not an immensely profitable business. This is because as earlier stated, the production is capital intensive. Therefore, only the minority are able to mine and process the ores. Brazilian mining company called the vale is the leading producer of the iron ore. In the second position are the Anglo Australian companies and a supplier in Australia. Iron ore that were shipped to other countries in 2004 was estimated to be 849 tones. Brazil and Australia have been found to be the leading producers of these ores with a seventy two per cent-market estimate. BHP and the other Rio Tinto Group in Australia are the leading producers together with vale. All the three companies control sixty-six per cent of the ore market (Mark 2008). Ore from Australia is attained from three main sources. One of these sources is pisolite ore or the channel deposit of iron. This ore is attained after a mechanical erosion of various primary banded formations of iron. These are then led to accumulate in various alluvial channels such as the pannawonica. The other types of ore are banded formations of iron such as the new man. Other types are coming up in the recent history such as laterite ores that are deposited near Lake Argyle in the west of Australia. India has the greatest number of recoverable reserves usually of iron ore. It consists of more than nine thousand million tones of the ore haematite and over three thousand million tones of the magnetite. There are a considerable number of principal producers of this ore in India. Consumption of ore globally grows by only ten per cent annually. The main consumers have been found out to be China, European Union, Korea, United States of America and Japan. China is now the most prevalent consumer of ore, therefore, being the largest producer of steel in the global world. Moreover, it has been found out to be the highest importer of the seaborne iron ore. After china, Korea and Japan follow. However, these two countries in addition to consuming a significant amount of iron ore, they are also interested in metallurgical coal (Pulliam 2008). For the last couple of years, the prices of iron ore have been generally unknown to the public. The prices were decided in closed-door meetings with the few miners available and the prevalent steel makers. Initially, the prices agreed upon by this two parties set the standard prices for this ores to be followed by the rest of the individuals in the global market. This system is, however, at the verge of break down. Participants along the demand and supply curves demands for a better pricing strategy. To enhance transparent pricing strategies, a few financial exchanges globally have offered the process of clearing the iron swaps. In addition, the Singapore mercantile of exchange (SMX) recently launched the first contract of iron ores destined for the future. This contract is based on MBIOI, which often makes use of the daily prices of data from a broad category of participants from industries across china. These future contracts have over seven monthly volumes of over 1.5 million tones. This is often after the first and subsequent eight months of constant trading. Before it is used in a blast furnace, it has to be virtually extracted from the ground and refined to remove all or almost all of the impurities. Much of the iron ore is mined through an open pit. The ground is removed to expose an extremely large area beneath. The ores are extracted, crushed, and later sorted in order of grade according to the percentage of iron in the ores. The refined ore is later on taken to the blast furnace to be melted. Pure iron is known to be soft and grayish white. It is almost impossible to come up with pure iron without some impurities. Mineral in the earth surface that have a high concentration of iron are called iron ores. These are often mined commercially by removing the earth surface with heavy machines. However, sometimes shafts are dug with side tunnels to follow the ore layers. Later on, the ore is then crushed and sorted. The best ore grade consists of over sixty per cent iron. Lesser grades of iron are treated, and the contaminants removed. These refining modes are collectively referred to as the beneficiation. These methods involve crushing the ores further, and then the ores are washed with a lot of water to make float all the sand and clay away from the ores. Later, magnetic separation is done; this is followed by pelletizing and finally sintering. These refining processes have become crucial because it is evidently difficult to mine pure iron. The refined ores are later on transported to the site of blast furnishing. After the processing bit is over, the ore has to be blended with other ores and then is introduced into the blast furnace. A blast furnace is often a structure usually made of steel and lined with bricks that are heat resistant. This mixture is poured at the top of the furnace. Then a unusually hot air is blown at the very top of the furnace. Coke is said to burn in the presence of this hot air. Oxygen, on the other hand, reacts with carbon to produce carbon monoxide. This carbon monoxide reacts with these ores to form carbon dioxide and pure iron. This iron sinks at the bottom the slag formed floats up thus separating the pure iron from the impurities. The iron might further on undergo through alloying process. All the hot gases that are emitted are drawn into a gas cleaning plant where they are cleaned and redirected back to the furnace. Carbon monoxide that remains is particularly useful in the chemical reaction undergoing in the furnace. This brick furnace goes for a long time before it later crumbles and thus requiring some maintenance. Types of iron ores Hematite ore It is extracted in all continents. However, great exploitations have been experienced in Asia, South America and Australia. Most of them source from iron formations that are altered banded. It is often rare than other rocks despite being cheaper to beneficiate. This is because it requires less energy to grind and alternatively crush. It, however, contains higher concentrations of other typical elements than other iron ores (Associate 1995). Magnetite branded deposits of iron These fine-grained rocks are composed of magnetite and silica. Locally, banded formations of iron are referred to as taconite in North America. Mining and processing of these elements includes coarse crushing followed by screening, then rough crushing later grinding it finely. This is done to reduce it to the extent that magnetite and quartz are fine enough. This is to ensure that when the resultant powder is passed through a sieve, quartz is left behind. In most cases, the size of the out coming magnetite determines the grind size. This determines the energy levels required. Most of these deposits require to be ground to between thirty-two and forty-five micrometers to survive the most required low concentrate of silica and magnetite. Currently, it is mined in Minnesota and in Michigan located in the United States of America. It is also found in the eastern parts of Canada. However, Brazil is the prime provider and miner of this iron ore and it exports it to Asia (Hartman 1992). Taconite It contains high content of silica. In the early twentieth century, iron was in extremely high quantities that taconite was seen as a waste product. After the Second World War, most of high quality sources of iron had been mined to the extent of expulsion. Therefore, taconite was viewed as the alternative source of iron. To process it, the ore has first to be ground into a fine powder. The iron is then separated from other rocks by the use of extremely strong magnets. It is then combined with a quantity of bentonite clay and some limestone as an alternative flux. It is then rolled into pellets that are approximately one centimeter in diameter. These pellets are sixty-five per cent irons. The pellets are then heated in exceedingly high temperatures to oxidize it to hematite to allow further processing. One of the main production areas of this is the mesabi iron range in Minnesota. Later, the concentrate is transported to the furnace. In all these processes, the key research findings are that iron is a much competitive commodity in the international market. Brazil seems to be the most influential continent in the mining and processing of these iron ores. Though there are other metal products that are more sought after than iron, it seems to have many uses. That has necessitated the importance of these metals in the international front. I have found out that China and Japan are one of the main beneficiaries of the metal product. Moreover, I have found out that the production of iron is capital intensive. A lot of money is required to extract it from the ground due to the heavy equipment or machines required. Moreover, the infrastructure in these areas should be perfectly well to assist and make it easier to transport these ores to the furnace after the beneficiation. Another key finding is that it is almost impossible to find perfectly pure irons in the global world today. Instead, minerals that consist of considerable amounts of iron are extracted and iron gotten from them. Hematite ore is much cheaper to extract and beneficiate. This is because it requires less energy to process and the mining process is easier. Ironically however, is that this ore is entirely infamous globally despite the low cost required in its maintenance. In addition, taconite was viewed as waste material way before the Second World War. However, later the high quality ores in the United States started depleting and their turned to this ore as their alternative for extracting iron. My source of data for this assignment is both primary and secondary. Primary sources contain first hand information about a topic. In my research, I used interviews, articles containing original research. Secondary data is data that is obtained from the first hand information. However, the writer in these cases has altered this information to suit their own. In this case, I used textbooks and historical art. All these sources of data are highly crucial in providing the required information required for research in question. However, primary data sources tend to be more useful because they present original information that in most cases have not been distorted. Textbooks gave me a complete view of the location of these mining sites and have some of the ores painted on them to enable people understood the shape of these ores. The interviews I carried out ensured that I got a complete view of the feedback provide by the miner and the sole customers of iron in the end process. Through these ample interviews, enabled and increases the knowledge of the cost involved in these processes Incase a prospective individual wishes to join. This especially was carried out on all those supervisors who saw to it that iron in their companies was extracted and processed. In addressing my research question, I have to start my research from the roots. This means that I will have to visit all those places that are involved in production of iron. I will have to gather a lot of information from both parties. These will mean travelling mostly to higher iron miners especially Brazil to gain as much insight on this issue as possible. After looking at the results from the production and distribution of this iron globally, one has to make a comparison with other metals to determine how competitive the commodity is in the international market. The ore seems to be competitive in some countries especially Japan and China. Chinese are known for their production of steel products. The second strategy would be to be involved in the production process. That way, one is able to gather as much information about the market of these ores internationally without raising a suspicious eye. One should seek employment in the venture one wants to be involved in. This means that if one just needs to know how competitive the commodity is in the global market, one has to try and get a job in the distribution sector. There, the individual is able to gather as much information as possible. A lot however has to be done if the cost of production of these ores is to be reduced. This is because the machines used in extraction and the energy used in the extraction process is extremely high. Therefore, the first strategic position to be done by these small countries is to seek for subsidies from the developed countries. The government officials in these countries should lease with government officials from developed countries to help them in purchasing the necessary equipment. Out of this harmony existing between these countries, they can be in a position to reach some agreement. Experts from developed countries should also institute for seminars with some officials in the less developed countries about these ore mining and production. This is because some of these countries can actually afford this production. They only lack the required zeal or just fear embarking on these activities thinking that the field is only for the high and mighty. With some professional advice from these experts, these countries can embark on this mining and processing of these ores and become even more successful than those developed countries that started the extraction of these metals long enough. In addition, these less developed countries should be advised to extract the type of ore that is easy to extract and process. This is because this type of ore is pocket friendly. Meaning that the capital required in extracting these ores from the ground and the energy level required for these ores is not exceptionally high. Ironically, all well to do members of the global world fail to recognize and make a complete usage of these ore. They have a perception that the quality of iron in this cheap ores seem to be extremely poor. However, this is not the case because haematite the most cheaply processed ore is of considerably high quality than the other ores. The most considerable data sources used in this research include both the secondary and primary sources, which included books, interviews and questionnaires. In all these data sources and data collection techniques, a lot had to be done. Books were an appropriate mode of collecting data. This is because books enabled the individuals to gain more access to information regarding these ores and their cycle. Most books even contain drawings or pictures of various ores involved and even the aerial view of the mining sites. Interviews and questionnaire were particularly crucial in accessing the feedback of those involved in the extraction of these ores on all the consequences that face this process. However, questionnaires are not extremely reliable because some questions may not be laid down. The respondent also structures the questions in questionnaires thus restricting the answers provide. However, the most appropriate mode of collecting data is through observation, especially direct observation. This is because the researcher is able to make first hand observation while at the same time experiencing the condition facing the respondents at that moment. Interviews also ensure accurate research because the respondent is face with the interviewer. Therefore, any attempts to lie during the interviewing process would be almost impossible. In addition, the interviewer would know when being lied to. Surveys are also carried out in this case, especially during the field study. Data analysis techniques used include bivariate analysis, univariate analysis and multivariate analysis. Univariate is an analysis of a single variable while multivariate looks at all the statistical methods often used simultaneously, to analyze multiple measurements on the commodity under investigation. For example, in a field study, the analysis technique carried out would be regression. Primary mode of data collection is highly crucial in this juncture. This is because this collects original information without prior distortion. Primary sources include such moves as conducting surveys or being involved in direct or participatory observation. In all these, data collected is often immensely accurate. However, this does not mean that data collected from secondary sources is often distorted. In fact, information that is collected through some secondary methods may be more accurate than data collected using the primary data collection methods. It is vital to know that despite all this, most data collected through secondary tends to be somehow distorted. This is because the information collected is passed through a lot of individuals before it can be acted upon. For example, surveys conducted all over a certain locality may turn out to be distorted due to the great number of individuals involved. Therefore, the smaller number of individuals involved the better. Therefore, it is immensely advisable to use the primary sources of data collection and analyze the data well in advance. References Associate, J 1995, Data collection : plain & simple : learning and application guide, Joiner Associates, Madison. Axinn, W 2006, Mixed method data collection strategies, Cambridge University Press, Cambridge. David, L 2006, Iron and Steel in America, Hagley Museum, New York. Edward, H 2007, Iron and Steel Works of the World, International Publications, Philadelphia. Hartman, H 1992, SME mining engineering handbook, Society For Mining Metallurgy, Littleton. Institute, L G 1997, Geographical Association, Ardent Media, Chicago. Jupp, V 2006, Data collection and analysis, Sage, London. Luttenberg, J 2009, Mineral Commodity Summaries 2009, Geological Survey, New York. Mark, L 2008, Spotlight on Iron and Steel, Rourke Enterprises, New York. Pulliam, P 2008, Data collection : planning for and collecting all types of data, Jossey Bass, San Francisco. 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