How China's Surge of Iron Ore Imports Seems to be Impacting Global Steel Production

- FN Media Group Presents USA News Group News Commentary

VANCOUVER, BC, April 1, 2021 /PRNewswire/ -- USA News Group - Back in the first quarter of 2020, China imposed economic lockdowns to combat the spread of coronavirus—an action that initially hit global prices of iron ore. But since reopening, China's economy has significantly bounced back into growth, causing a major swing in demand for steel production, and a record breaking August for iron imports.

Global steel production recovered in response, pushing steel and iron producers such as Cleveland-Cliffs Inc. (NYSE:CLF), ArcelorMittal (NYSE:MT), Vale S.A. (NYSE:VALE) and Rio Tinto Group (NYSE:RIO) to respond to rising demand, while also pushing further demand for materials such as fluorite from producers like Ares Strategic Mining Inc. (TSXV:ARS) (OTCQX:ARSMF).

A key ingredient in the making of steel, the issue of the fluorite (or "fluorspar") supply is integral to steel's resurgence. Earlier this year, price increases in China suggested a coronavirus supply disruption. Domestically, the only currently producing fluorspar mine is the Lost Sheep mine in Utah, owned and operated by Ares Strategic Mining Inc. (TSXV:ARS) (OTCQX:ARSMF).

The firm has begun investing in the upgrade of the Lost Sheep mine's facility, with expanded mine designs, and a new high capacity plant to significantly increase production capacity, make Ares the only domestic supplier of products such as acidspar and metspar. Ares projects that the equipment to upgrade operations will only cost roughly US$3 million to acquire and install.

Bolstering their ambitions, Ares also recently announced a new fluorspar discovery on Lost Sheep's permitted mining area, with very promising results. The newly discovered zone connects two known mining sites on the property and expands the preliminary mining plan scope. All 5 drill holes within the new zone intersected fluorspar mineralization, with boundaries still remining open.

"The high grade results from the last drill program gave us a great insight into the geology and layout of the subsurface fluorspar mineralization, and directed the Company towards locations where high-grade fluorspar was likely located," said James Walker, President and CEO of the Ares Strategic Mining. "The first drill holes have confirmed that Ares' geological assessment were correct… Ares can now consider expanding its proposed production capacity and processing facilities at its mine and anticipates secondary and tertiary mining operations at other sites alongside its Giant Little Pit operation."