One of the most traded commodities in the world, iron ore is the main component of steel.
Iron is the most common element in the Earth. Almost never found in its metallic form, it is instead extracted from several types of ore. Iron ore is overwhelming used to make steel. This means that far more iron – in the form of steel – is used by humans than any other metal. Once iron is alloyed to produce steel, it has multiple applications due to its strength and versatility, notably in the construction industry.
Australia is the dominant producer of iron ore and Brazil is the second biggest player. The market is highly influenced by China’s dependence on imports. Iron ore operations are under heightened scrutiny from NGOs and the international, largely due to two recent incidents that exposed poor ESG management practices – the catastrophic failure at the Brumadinho tailings dam in Brazil in 2019, and the destruction of the Juukan Gorge cultural heritage site in Australia in 2020.
Main Uses and Attributes
Iron is the fourth most common element in the Earth’s crust (and the most common element in the Earth overall).1https://pubs.acs.org/doi/pdf/10.1021/cb300323q However, iron is almost never found in its metallic state; instead, it is extracted from iron ores.
The overwhelming majority of iron ore is used in steelmaking, in which iron is alloyed with carbon and other minerals to produce a material ideally suited for construction due to its strength and versatility.2https://geology.com/rocks/iron-ore.shtml In terms of volume, vastly more iron – in the form of steel – is used by humans than all other metals combined.
The most important use of steel is in construction, where it is used in beams, reinforcing rods and other components. It is also used to make vehicles, industrial equipment, machinery, bridges, and highways. Steel is employed in water pipes and canned food, and paints. It is sold in more than 3,500 different grades, with different attributes, sizes and thicknesses to make it suitable for its wide range of applications.3https://www.worldsteel.org/about-steel/steel-facts.html
Only 2 percent of iron ore is used in applications other than steel, including as a powder to add to some types of steels and magnets; in medications and research as radioactive iron; and also as a pigment in its form of iron blue and black iron oxide.4https://www.nrcan.gc.ca/our-natural-resources/minerals-mining/minerals-metals-facts/iron-ore-facts/20517
Supply Chain Risk
TDi assesses Iron for key risks affecting the security of supply, and for its association with artisanal and small-scale mining.
Country Governance Risks
Iron's association with countries experiencing:
Association with ESG issues
TDi Sustainability's data rates Iron's association with the following issues as high or very high: