Proactive Investors - Run By Investors For Investors

Black Iron shares advance as it brushes off President Trump's steel tariff plan

The company does not expect an adverse impact to the value of its Shymanivske Iron Ore project in the Ukraine
Black Iron shares advance as it brushes off President Trump's steel tariff plan
Iron ore is used in the steel making industry

Shares in Black Iron Inc (TSE:BKI) advanced this week after the firm brushed off US President Donald Trump's plans to impose import tariffs on steel, saying it does not think it will affect global iron ore prices.

Starting this week, the White House says it will put tariffs of 25% on imported steel and 10% on imported aluminium.

READ: Black Iron's project worth another look amid rising iron ore prices

Black Iron notes that the US only consumes around 6% of total global steel produced.

It also does not expect an adverse impact to the value of its Shymanivske Iron Ore project in the Ukraine, given the "very conservative US$62 per tonne benchmark price used in the company’s preliminary economic assessment to estimate the after-tax unlevered 36% internal rate of return on the project as compared to today’s 25% higher benchmark iron ore price of US$78 per tonne".

Black Iron noted that the US produced around 79 mln tonnes per year and is a net importer of 22 mln tonnes per year, which in total is only 6% of global production.

China, meanwhile, which supplies less than 1% of the steel imported into the US, produced 808 mln tonnes in 2016.

There, the company also noted, the demand for high grade iron ore was likely to increase, given the new environmental regulations imposed late last year, which have already resulted in numerous domestic iron ore miners being forced to shut down due to the low quality of iron ore produced. 

The new environmental regulations are driving a shift towards higher quality iron ore both in terms of iron content and use of pellets/pellet feed, said Black Iron.

"Black Iron expects to produce an ultra high-grade premium 68% iron ore product from the project. This ultra-high-grade product is within the top 4% of global production based on grade and highly desirable for China’s steel mills given the new Chinese regulations."

Black Iron shares added 5.26% to C$0.10 on Monday and on Tuesday, closed 10.53% ahead at C$0.10.

View full BKI profile View Profile

Black Iron Inc. Timeline

Related Articles

1536063673_1-19327052345_bc81a69e58_o.jpg
September 05 2018
Currently, the parcel of land is owned by the government, the company said in a regulatory release
1542716805_Strategic-Minerals---Cobre.jpg
November 20 2018
Strategic Minerals has a carefully crafted portfolio of projects in New Mexico, the UK and Australia
copper tubes
May 30 2018
The latest economic study at Parys Mountain has delivered some encouraging numbers against a backdrop of rising base metals prices

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use