Ann: Operational Update Phase 3 Acceleration, page-49

Maybe IOR (old NSL) should produce iron ore pellets. This is where the money is.
This week high grade iron ore pellet premium has just hit an all time high of US$67 /tonne. The current price for iron ore pellets has now hit US$130/tonne.   

Survival of the Finest-Miners Reboot as Smog-Hit China Seeks High Grade Ore

By Reuters

• July 13, 2018

BEIJING/MANILA — For miners seeking to cater to the changing appetite of China, the world's biggest iron ore importer, all eyes are on Tangshan, the country's biggest steel-making city and the drastic measures it's taking to rein in pollution.
It has just told mills in the city that production cuts, initially set at about 10-15 percent and in place from May to November, need to go further with some firms facing curbs of up to 50 percent during the summer.
Tangshan has also warned mills they could face closure if they don't meet emission targets by October. The steps are at the forefront of a crackdown by Beijing, which this month flagged a widening of anti-smog targets to 82 cities from 28 now.
The impact on pricing for iron ore has been dramatic and miners are scrambling to revamp their strategies in response.

For lower grade ore, where the iron content is below 60 percent, discounts to higher grade material have widened significantly. In contrast, premiums for high-grade pellets, which can be shovelled straight into a steel furnace and do not go through a highly pollutive process called sintering, have surged.
"The era for China to buy cheap low-grade ore in order to be cost effective has passed. What China needs now and in the future will be more sophisticated ore, with higher iron and lower impurity content," said Zhang Kun, a Beijing-based iron ore trader at Concord Fortune.



The slew of industry initiatives includes a makeover for No. 2 iron ore miner Rio Tinto Ltd's flagship iron ore product, sources with knowledge of the matter told Reuters.
Its Pilbara Blend (PB) fines, the benchmark for fines, will have less alumina and will be less pollutive after part of the blend was removed and launched as a separate medium ore grade called RTX last week, they said.
"The main purpose of this move is to maintain the competitiveness of our mainstream product, PB fines, in the Chinese market after seeing smaller premiums in the past quarter," said a company source, who was not authorised to speak to the media and did not want to be identified.


PELLET POWER
Of the big four iron ore miners, Brazil's Vale stands to benefit the most from the market shift, particularly from the jump in Chinese demand for pellets - one of the few options for mills when output curbs kick in on heavy smog days.
"Our inventory for sintered ore is running low due to frequent production curbs. I am willing to pay whatever it costs to replenish and add stocks for pellets," said a manager at a domestic steel mill in Tangshan, declining to be identified as he was not authorised to speak to media.
The benchmark price for 65 percent iron content pellets <.IO65BP-CNO=MB> has shot up by a fifth over the past year, according to Metal Bulletin, while the premium on pellets over 62-percent fines <.IO62-CNO=MB> surged to $56.84 a tonne on July 6, not far off a record $65.40 reached last October.
Premium of high-grade iron ore pellets vs medium-grade iron ore fines: https://reut.rs/2J7pq9p
Vale produces nearly a third of the world's pellets for export and has restarted some idled pelletising plants to account for a drop-off in output after a 2015 dam disaster closed its Samarco venture with BHP.
And it has a leg up on rivals with high-grade fines due to its massive S11D iron ore mine in Vale's rich-grade Carajas resource complex that started shipping out ore last year.
China's use of pellets is around 12-13 percent of its iron ore consumption, low compared to Europe where it is 33 percent, according to consultancy CRU International, adding that imports account for just 13 percent.
China's annual pellet consumption is expected to increase 14 percent over the next five years to around 160 million tonnes as Brazil boosts pellet production and more pellet becomes available elsewhere, said Erik Hedborg, senior analyst for iron ore at CRU.