Origins — Australia
The origin the freight market is built around.
Iron ore and coking coal leave Australia in the largest parcels in the dry bulk trade. Nothing here is priced flat — the negotiation is the differential, the window and who declares it.
- Share of seaborne iron ore
- About half
- Share of seaborne coking coal
- Around half
- Lithium, global rank
- First
- Port Hedland
- Largest bulk port on earth
Overview
Reliable, expensive, and indexed.
Australia is the volume origin. Iron ore and coking coal leave here in the largest parcels in the dry bulk trade, and the loading programmes out of Port Hedland, Dampier, Hay Point and Newcastle set the Capesize and Panamax freight market on the routes we run.
Almost nothing is negotiated as a flat number. Iron ore prices against the 62% Fe CFR North China index with published differentials for 65% and 58% material, plus a lump premium; coking coal prices against the premium low-volatile hard coking coal index. The negotiation is about the differential, the pricing window and the declaration mechanics.
It is the most operationally reliable origin we buy from and one of the most expensive. State royalties, an emissions safeguard regime with declining baselines, heritage clearance obligations and a nickel industry that Indonesian supply has priced out are all part of the cost base rather than exceptions to it.
Minerals desk
Pilbara iron ore, priced on the differential.
The Pilbara supplies roughly half of seaborne iron ore as a small number of branded blends, each with a known grade and impurity signature. Buyers are not choosing between cargoes so much as between blends, and the blend is what the differential prices.
Grades have drifted down towards 60 to 61% Fe as the older high-grade pits deplete, which is why the 65% and 62% differentials have widened and why magnetite projects like Iron Bridge exist. Silica, alumina and phosphorus penalties do the rest of the work in a mill's valuation.
Loading is Capesize and Newcastlemax on tidal windows. Port Hedland is draft-restricted and sails on the tide in convoy, so a missed window is not a delay of hours. Cyclone season from November to April clears the anchorage entirely and is written into every laycan.
Minerals desk →| Operation | Location | Owner and product |
|---|---|---|
| Mount Whaleback, Area C, South Flank | Pilbara, WA | BHP — Newman and Mining Area C blends through Port Hedland |
| Hamersley, Tom Price, Paraburdoo, Gudai-Darri | Pilbara, WA | Rio Tinto — Pilbara Blend through Dampier and Cape Lambert |
| Cloudbreak and Christmas Creek | Pilbara, WA | Fortescue — lower-grade fines sold at a published discount |
| Iron Bridge | Pilbara, WA | Fortescue — magnetite concentrate at 67% Fe, the answer to grade decline |
| Roy Hill | Pilbara, WA | Hancock — integrated mine, rail and Port Hedland berth |
| Onslow | Pilbara, WA | Mineral Resources — transhipment rather than a deepwater berth |
Energy desk
Bowen Basin coking coal, the global benchmark.
Queensland premium low-volatile hard coking coal is the reference against which every other metallurgical coal in the world is priced. When a mill anywhere quotes a coking coal number, this is the basin it is quoting from.
The book runs across four qualities that are not substitutes: premium hard coking coal, second-tier hard coking coal, semi-soft as a blend component, and PCI injected through the tuyeres rather than coked at all. CSR, ash, volatile matter, sulphur and fluidity decide which is which, and a coke battery's blend is engineered around them.
Export runs through Dalrymple Bay, Hay Point, Abbot Point and Gladstone, where contracted terminal capacity is a tradeable right in itself. Queue management at the coal terminals is a real demurrage exposure and is priced into the fixture, not absorbed after it.
Energy desk →| Operation | Quality | Owner and basin |
|---|---|---|
| Goonyella Riverside, Peak Downs, Saraji, Caval Ridge | Premium hard coking coal | BHP Mitsubishi Alliance, Bowen Basin — the benchmark tonnes |
| Moranbah North, Grosvenor, Capcoal | Hard coking coal | Anglo American, Bowen Basin — portfolio under sale |
| Hail Creek | Hard coking coal and thermal | Glencore, Bowen Basin |
| Daunia and Blackwater | Coking and PCI | Whitehaven, acquired from BHP in 2024 |
| Curragh | Coking and thermal | Coronado, Bowen Basin |
| Illawarra | Hard coking coal | New South Wales — underground, sold out of Port Kembla |
Energy desk
Hunter Valley thermal, at the top of the quality range.
New South Wales thermal coal sits at 5,500 to 6,000 kcal/kg NAR — the opposite end of the range from Indonesian tonnes, and priced against a different index. The 6,000 kcal Newcastle assessment is the global high-CV thermal benchmark.
Demand splits cleanly. Japanese, Korean and Taiwanese utilities contract on term at the top specification and pay for reliability; Chinese and Indian buyers take the 5,500 kcal material on spot and price it against the alternative. We run both, and the arbitrage between them is a real part of the desk's margin.
Newcastle is the largest coal export port in the world and operates a capacity allocation system. Tonnage rights there are contractual and finite, which is a constraint on how much a trader can actually move regardless of what is bought at the mine gate.
Energy desk →| Mine | Typical grade | Owner and region |
|---|---|---|
| Hunter Valley Operations and Mt Owen | 5,500 – 6,000 kcal/kg NAR | Glencore, New South Wales |
| Bengalla | 5,500 – 6,000 kcal/kg NAR | New Hope and partners, Hunter Valley |
| Maules Creek and Narrabri | 6,000 kcal/kg NAR and above | Whitehaven — among the highest specification in the seaborne market |
| Mount Arthur | 5,500 kcal/kg NAR | BHP — scheduled to close in 2030, with the tonnes not being replaced |
Minerals desk
Hard rock lithium, and the only Western rare earth chain.
Australia is the largest lithium producer in the world and it produces a different product from South America. Spodumene concentrate at nominal 6% Li₂O is a shippable mineral concentrate, not a chemical, and almost all of it is converted in China.
That conversion dependency is the whole commercial question. Spodumene pricing moved from fixed annual contracts to index and spot as the market matured, and a concentrate seller with no conversion relationship is exposed to a very small number of buyers.
Rare earths are the exception to the China-converts-everything rule. Mount Weld concentrate is processed at Kalgoorlie and separated in Malaysia — the only rare earth separation capacity of scale outside China — with further refining capacity being built in Western Australia. It is a small chain, and it is the only Western one that exists.
Minerals desk →| Operation | Product | Owner and note |
|---|---|---|
| Greenbushes | Spodumene, 6% Li₂O | Talison — Albemarle, Tianqi and IGO. The largest and highest-grade hard rock lithium mine |
| Pilgangoora | Spodumene concentrate | Pilbara Minerals, WA |
| Wodgina | Spodumene concentrate | Mineral Resources and Albemarle, WA |
| Mt Marion and Kathleen Valley | Spodumene concentrate | Mineral Resources and Liontown, WA |
| Mount Weld | Rare earth concentrate | Lynas — one of the highest-grade REE deposits, separated outside China |
| Eneabba | Rare earth refinery | Iluka, WA — refining capacity under construction on stockpiled monazite |
Metals desk
Copper, zinc, bauxite and the manganese lesson.
Olympic Dam is a copper mine that also holds the largest uranium deposit in the world, with gold and silver alongside. Few orebodies anywhere carry that combination, and it makes the operation's economics unusually insensitive to any single metal.
McArthur River and Cannington sit near the top of the world zinc and silver-lead tables, and Weipa and the Darling Range bauxite operations feed Australian alumina refineries rather than shipping raw ore.
Groote Eylandt is the cautionary example on this page. A cyclone destroyed the export wharf in early 2024, took a major share of world manganese ore supply out of the market at a stroke, and repriced the alloy chain globally. Single-point export infrastructure is a supply risk regardless of how good the orebody is.
Metals desk →| Operation | Product | Owner and note |
|---|---|---|
| Olympic Dam | Copper, uranium, gold, silver | BHP, South Australia — the largest uranium deposit in the world |
| Prominent Hill and Carrapateena | Copper-gold | BHP, South Australia |
| McArthur River | Zinc-lead concentrate | Glencore, Northern Territory — among the largest zinc mines globally |
| Cannington | Silver-lead | South32, Queensland |
| Weipa | Bauxite | Rio Tinto, Queensland |
| Huntly and Willowdale | Bauxite | Alcoa, WA — feeding Pinjarra, Wagerup and Kwinana alumina |
| GEMCO, Groote Eylandt | Manganese ore | South32, NT — wharf destroyed by cyclone in 2024, repricing the global market |
| Nickel West | Nickel | BHP, WA — suspended in 2024, priced out by Indonesian supply |
Regulation
What sits between the mine and the vessel.
This is a low-risk jurisdiction with a high cost base and a specific set of hard constraints. These are the ones that decide whether a contracted tonne can actually be lifted.
- 01State royalties
- Royalties are levied by the states, not the Commonwealth, and they differ materially. Queensland runs progressive coal tiers that step up steeply at high prices, and Western Australia charges ad valorem on iron ore. Both sit in the delivered cost and both have been changed at short notice.
- 02Safeguard mechanism
- Large emitting facilities operate under baselines that decline each year, with credits and shortfalls tradeable. It is a live input into the economics of new coal and gas capacity and into the long-run supply of the tonnes we contract.
- 03Heritage and native title
- Heritage clearance and native title agreements are project-critical, and the standard expected of operators moved permanently after Juukan Gorge. An approval without a durable agreement behind it is a schedule risk.
- 04Port and rail capacity
- Terminal capacity at Dalrymple Bay, Newcastle and the Pilbara ports is allocated and contractual. Tonnage rights are a separate asset from the coal or ore itself, and a seller without them cannot ship what they have sold.
- 05Foreign investment review
- Acquisitions in critical minerals attract scrutiny under the foreign investment regime, and that scrutiny has tightened. It shapes who can own an offtake position as well as who can own a mine.
- 06Index pricing mechanics
- Contracts reference published indices with a declaration window rather than a negotiated flat price. Which index, which averaging period and who declares are agreed at contract, because all three are worth more than the differential being argued over.
Execution
Tides, cyclones and terminal queues.
- Port Hedland sails on tidal windows in convoy, draft-restricted, so a missed window costs a tide rather than an hour
- Cyclone season from November to April in the Pilbara and the Gulf — ports clear, vessels sail, and laycan is written around it
- Queue management at Dalrymple Bay, Hay Point and Newcastle, with the demurrage exposure priced into the fixture
- Capesize and Newcastlemax on the iron ore routes, Panamax and Supramax on coal, with the route index checked before the cargo is priced
- Independent draft survey and sampling to ISO methods at load, with the umpire laboratory named in the contract
- Index averaging window and declaration mechanics fixed at contract, and the swap placed to match
Origination
Producers and terminal capacity holders in Australia can reach the minerals and energy desks directly.