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SA Recycling enters iron ore trade

Keywords: Tags  iron ore, ferrous raw materials, scrap, SA Recycling, George Adams, Sean Davidson

NEW YORK — Southern California is set to export its first bulk shipment of iron ore, with one of the state’s largest ferrous and nonferrous scrap processors and exporters, SA Recycling LLC, entering the trade.

The company has started loading a vessel with 50,000 tonnes of iron ore sourced from southwestern mines.

It will be the Orange, Calif.-based recycler’s first venture outside the scrap metal industry, which has faced serious challenges over the past year, chief executive officer George Adams Jr. said.

"We don’t have the scrap business like we used to have down here," Adams told AMM. "I’ve been working hard to find other commodities that we can handle. I looked at a lot of commodities: wood chips, coal ... I looked at every type of bulk commodity that went through this port that we could make money off, but none of them really fit with our business. Iron ore did."

SA Recycling’s large operation for exporting ferrous scrap to steelmakers in East Asia could easily be adapted to accommodate iron ore, Adams said. "The same customers that are buying scrap are buying iron ore. They are buying a lot of it. So there’s lots of opportunity there to do it. For me to handle iron ore, all I had to do was put in a rail-car unloader."

The material will be sourced from mines in California and Utah, and the company also is in talks with a mine in Nevada. "There’s a lot of iron ore in the Southwest," Adams said. "There are about four or five mines, and we’re the closest port. So we’re getting iron ore from these mines. We’re beneficiating some, buying some and handling some. Iron ore is a very natural fit for us."

The Southwest was home to several iron ore mines which fed large integrated mills in the region in the past. The closure of those mills over the years forced the mines to shut down. However, China’s appetite for iron ore has pushed up prices, once again making mining in the Southwest viable, according to Adams.

"You used to have all these integrated mills, and they were building here and living off the iron ore in the region. And these mines are still there," he said. "The mills have been closed for all these years, but when the price of iron ore went over $100, all these mines became viable. So they’re starting to produce iron ore again, and there really wasn’t a good facility to handle it. So we stepped in."

SA Recycling ships about 2.5 million tonnes of scrap each year and ultimately hopes to reach the same volume with iron ore, Adams said. "There’s no reason I can’t do the same with iron ore. The Southwest mines can produce that much. They used to do more than that." The company expects to ship 1 million tonnes of iron ore this year.

In addition, the new venture will give SA Recycling the ability to load mixed cargoes carrying iron ore and scrap, should customers require it.

The seemingly natural fit could attract other West Coast ferrous scrap sellers to the trade, but Adams said that the barriers to entry are significant. "I welcome any competition, but it’s harder than it seems," he said. "I have two docks and can load scrap out of one and iron ore out of the other. We have the luxury of space that other people don’t have. And we have good rail access with the mines."

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