Supply Chain of Iron Ore

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  • Topic: Iron ore, Mining, Iron
  • Pages : 9 (3130 words )
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  • Published : September 3, 2011
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With the increasing demand in iron ore due to rapid industrialisation and increase in demand of steel, the need for a proper distribution network or a supply chain has been realised. The following section takes into account the supply chain system of iron ore with some examples quoted from the Australia-China supply chain, which is one of the most important supply chains due to Australia being the largest exporter and China being the largest importer of iron ore. Logistic System:

The iron ore logistic chain is comparatively simpler as compared to some other commodities. Ore is transferred directly from the mine site to the steel plant refinery through various transportation sources like rail, sea or road and conveyors. The transport of iron ore forms 15-45% of the total cost of the exported ore and more than 60% of the cost of domestic consumption of coal. Iron ore’s high density and large volumes make the transportation and handling more expensive and time consuming. Hence, the efficiency of the total supply chain of iron ore is very important for the overall profitability of a mining operation. The basic supply chain of iron ore can be depicted as follows:

Fig. 1 International supply chain for iron ore

Fig. 2 Domestic/inland supply chain for iron ore

1. Mine Site: A mine site is an area from where the iron ore is mined in it’s most basic and natural form and is not ready to be used in the steel industry or refinery. The ore is extracted from open cut mines using drilling and blasting techniques. There are three main types of iron ore deposits. a) Magmatic Magnetite ore deposits: It is the most magnetic of all the elements present on the earth surface. Some iron ore deposits in Chile, formed from volcanic flows are known to have magnetite ore deposits in them. Metamorphic accumulations of the ore at Tasmania also are a rich source of magnetite form of iron ore. b) Hematite ore: This ore is found on every continent except for Antarctica, with great intensity in South America, Australia and Asia. Although rarer to find, it is cheaper to process as it does not require any beneficiation process. But being harder than magnetite they require more energy for crushing. c) Banded Iron Formation (BIF): These are metamorphosed sedimentary rocks composed of thinly blended iron minerals and silica. The mining involves moving tremendous amounts of ore and waste. The waste comes in two forms, bedrock in the mine (mullock) that isn't ore, and unwanted minerals which are an intrinsic part of the ore rock itself (gangue). The mullock is mined and piled in waste dumps, and the gangue is separated during the beneficiation process and is removed as tailings. Taconite tailings are mostly the mineral quartz, which is chemically inert. This material is stored in large, -regulated water settling ponds. The key economic parameters for magnetite ore being economic are the crystallinity of the magnetite, the grade of the iron within the BIF host rock, and the contaminant elements which exist within the magnetite concentrate. The size and strip ratio of most magnetite resources is irrelevant as BIF formations can be hundreds of metres thick, with hundreds of kilometers of strike, and can easily come to more than 3,000 million or more, tonnes of contained ore.

2. Stockpiling and Blending: After the impure ore is extracted from the mine, it is stored on a plot which may be on the same place as the mine or away from it. To transfer the ore to the plot, road transportation is used. The stored ore for purification undergoes beneficiation. It is the process of separating the mineral from the unwanted waste or gangue. The mineral is then transported further in the supply chain. The gangue is mainly dumped as it of no use. A recent technical breakthrough in the mining industry has made the beneficiation process much cheaper as compared to before. The new technology, ESS, not only is useful for the...
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