West and Central African Iron Ore: A Lesson in the Contestability of the Iron Ore Market

29 Pages Posted: 6 Jul 2012 Last revised: 13 Jul 2012

See all articles by Luke Hurst

Luke Hurst

affiliation not provided to SSRN

Date Written: May 1, 2012

Abstract

The paper briefly sets out factors behind Chinese demand for iron ore imports and the main features of China’s medium term resources consumption growth path. It then outlines the potential of major iron ore export countries to meet China’s medium term iron ore import demands.

The focus of the paper in on the potential of iron ore supplies from west and central Africa to enter the export market over the short and medium terms. To assess this, three export capacity scenarios (low, medium and high risk) are constructed for 17 iron ore mines (over 27 production expansion phases) in west and central Africa.

The result suggest the development of west and central African iron ore has the potential to create significant downward pressure on the price of iron ore exports over the short to medium term. The impact of the excess export capacity on iron ore price is estimated and it suggests that there would be significant knock-off effects for iron ore-centric economies such as Australia and Brazil.

Keywords: iron ore, export, economy, import

JEL Classification: L72, O13, Q31, Q37

Suggested Citation

Hurst, Luke, West and Central African Iron Ore: A Lesson in the Contestability of the Iron Ore Market (May 1, 2012). Crawford School Research Paper No. # 12-02, Available at SSRN: https://ssrn.com/abstract=2101467 or http://dx.doi.org/10.2139/ssrn.2101467

Luke Hurst (Contact Author)

affiliation not provided to SSRN

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