Ukraine Iron Ore Mining - Natural Resources and Research

Ukraine is a huge role player

Anyone who is knowledgeable about the iron producing industry will be very much aware of the huge impact that Ukraine has on this industry. According to currently available statistics Ukraine are only exceeded by seven other countries when it comes to the production of steel. Likewise in the area of iron exports there are only two other companies that are currently exporting more iron than Ukraine. When one looks at the total global crude steel output at least 2% of that overall total are being provided by the Ukraine. The Ukrainian steel industry are contributing 5% and more to the gross domestic product. Also when it comes to exports 34 percent of the total exports of the Ukraine comes from the steel industry according to statistics which has been released in 2007. Those statistics have also shown that over 400,000 people which represent over 10% of the total industrial labor force and over 2% of the national workforce are employed in this steel industry. Therefore comes as no surprise that the steel industry are considered a very important component of the Ukrainian economy. According to well researched statistics the Ukrainian steel industry have reached its highest level in 2007 when over 40,000,000 tons have been produced but unfortunately the slower economic conditions which followed shortly after pushed down the total production to below 30,000,000 tons.

The Ukraine possess huge iron ore deposits

Just like Australia and South Africa the Ukraine is fortunate enough to have huge natural iron ore deposits. Although there are exceedingly more iron ore deposits than could ever be used locally in the Ukraine and therefore exports are the only solution the only problem is that the high cost of extraction hampers the benefits which could be derived from exports. There are at least 14 active iron ore mining companies operating within the Ukraine and a similar amount of iron and steel mills and a couple of other steel production plants which specializes especially in ferroalloy elements. Since 2006 there has been a considerable modernization and an effort has been made to introduce more cost effective methods which also requires significantly lower sources of energy in order to produce steel products. During the 1990s Ukrainian’s steel industry has been privatized which has apparently benefitted this industry because the coal mining industry which are still government owned are struggling with never ending financial problems.

Several other deposits exist

The Ukraine does not only have iron ore deposits but also have a considerable amount of manganese and it actually has over 70% of the manganese deposits among all the old USSR countries. There are also substantial aluminum deposits in certain areas of the country but the production of aluminum are significantly limited because of the available of energy and also because of higher production costs. However according to statistics the available aluminum which can be produced in the Ukraine alone provides in about 30% of the local demand and are therefore not making as much impact as iron ore production.

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The global supply of manganese ore

The markets in context 

An in depth analysis of the manganese ore production over the next five years seem to indicate that conditions will continue to remain very favorable for the producers of such manganese ore. There are several reasons why it could be expected that prices which will be paid for such manganese ore will continue to remain on favorable levels. There has been a slight decline in the quality of manganese ore and this is forcing steel producers to make use of more blending and this is why they are more than willing to pay higher prices for high grade manganese ore. The focus seems to be on the variety of several grades of stainless steel and not so much on the general steel production and this is why the demand for nickel as well as manganese alloys will continue to increase. There has been an increase per capita in the developing worlds because of higher population numbers and therefore a reduction in the demand for manganese is very unlikely. Although there has been additional sources of manganese ore that has been discovered such new sources are not adequate to satisfy the increasing demand and in most cases the cost of production are substantially higher and all of this is working in the favor of sustainable manganese ore demand.

The South African position

South Africa continues to play a very important role in the supply of iron ore and other related products. This country is still the 3rd largest exporter of iron ore to China which just proves once again the very real importance of iron ore deposits which exist in South Africa which once again emphasizes its importance as a global contributor. South Africa is still the seventh-largest producer of iron ore and for many years they had been a force to reckon with in the area of iron ore exports and such exports has increased even more because of the suspension of mining operations in India in September 2012. According to statistics South Africa has produced an astonishing 67 million metric tons of iron ore in 2013 alone. During that same time it has been established that South Africa has over 1000 million tons of crude ore reserves and they also have at least 650 million metric tons of mineable iron content reserves. This is one of the reasons was that Africa is a very important supplier of iron ore and it provides foreign steel producers with additional options when it comes to blending opportunities. A limiting factor on the amount of iron ore which could be exported by South Africa are the capacities which can could be handled on the iron ore railway lines.

The global market

It is a well-known fact that global economics will play a very important role in the actual size of the iron ore market. In this regard China will continue to be a very large factor and if their focus on urbanization continues it is also likely that the demand for steel related products will continue to be high. Unfortunately the recent economic problems had a very real impact on steel production and in many regions including Europe there had been problems and this had a very real impact on South Africa which rely on such iron ore exports to grow its economy.



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