Comments from the Managing director

NIO moves to complete the economic feasibility study of the Blötberget mine project

Following the appointment of Golder, to conclude the final stages of the technical and economics of the feasibility study, work has commenced to specify the equipment required and the final design of the mine layout in order to execute the construction of the mine. At the mine location some final site investigations will be undertaken in the proposed industrial area, where primarily the process plant, associated materials handling equipment and rail terminal are planned.

In order to secure the completion of the feasibility study during the remainder of this year and early 2019 NIO successfully concluded a rights issue in June.

Our market

The general view is that we have a two tier iron ore market developing, with the standard 62%Fe index and a newer index for 65%Fe reflecting the higher quality ores. The divergence of the two indices reinforces the fact that there is a high demand for good quality iron ores >65%Fe. This, as stated before is largely driven by China and its environmental policy.

Premiums for all quality ores, including pellets remain very strong, and are expected to remain so for the next couple of years at least. There appears to be little in the way of new supply of high quality iron ores (especially magnetite rich) to satisfy demand, especially as there are only a few developments able to return to production without raising major amounts of capital. Those who are able to return to production or start production are also low volumes and will not fully meet demands.