Table of Contents
Re-Lighting the Global Furnace .......................................................................................................5
Key Global Picks – Iron Ore.............................................................................................................8
Key Global Picks – Coal...................................................................................................................9
Steel Market Outlook......................................................................................................................10
Iron Ore Market Outlook ................................................................................................................20
Coking Coal Market Outlook..........................................................................................................33
Risks to Our View...........................................................................................................................43
Company Profiles:
Aquila Resources (ASX: AQA)......................................................................................................46
Atlas Iron (ASX: AGO) ..................................................................................................................49
Centennial Coal (ASX: CEY) .........................................................................................................52
Fortescue Metals (ASX: FMG).......................................................................................................55
Gindalbie Metals (ASX: GBG).......................................................................................................58
Labrador Iron Ore Royalty Income Fund (TSX: LIF.UN)..............................................................61
Macarthur Coal (ASX: MCC).........................................................................................................65
Mount Gibson (ASX: MGX) ..........................................................................................................68
Northern Energy (ASX: NEC)........................................................................................................71
Northern Iron (ASX: NFE) .............................................................................................................74
Riversdale Mining (ASX: RIV) ......................................................................................................77
Straits Resources (ASX: SRL)........................................................................................................80
Teck Resources (TSX: TCK.B; NYSE: TCK)................................................................................83
Vale (NYSE: VALE; NYSE: VALE.P)..........................................................................................87
Sector Comparatives .......................................................................................................................91
Other Australian Sector Players......................................................................................................99
Appendices:
Appendix I: Iron Ore 101..............................................................................................................104
Appendix II: Iron Ore Product Streams ........................................................................................106
Appendix III: Iron Ore Products And Pricing...............................................................................107
Appendix IV: Iron Ore Exports 2007 ...........................................................................................109
Appendix V: How Coal Is Formed ...............................................................................................111
Appendix VI: Coal Classification .................................................................................................112
Appendix VII: Coal Used in Steel Making – Coking Coal...........................................................114
Appendix VIII: Pulverised Coal Injection (PCI)...........................................................................115
Appendix IX: The Coking Coal Market – A Brief Overview.......................................................117
Appendix X: Diagrammatical Overview of the Steel Making Process.........................................119
Appendix XI: Steel Making ..........................................................................................................120
Appendix XII: Direct Reduced Iron..............................................................................................124
Appendix XIII: Scrap in the Steel Process....................................................................................125
Appendix XIV: Continuous Casting .............................................................................................126
Appendix XV: Metallurgical Coke and Flux ................................................................................127
Appendix XVI: Australian Iron Ore Ports ....................................................................................129
Appendix XVII: Major Coal Ports................................................................................................130
Appendix XVIII: Glossary of Coal Terms....................................................................................131
Appendix XIX: Rules of Thumb...................................................................................................132
Required Disclosures ....................................................................................................................133