The Steel Industry in Flux: How Strategic Resources Is Solving the Problems Facing Rio Tinto and thyssenkrupp

Rio Tinto: The "Pilbara Problem" Forces Investments in New Smelting Technologies

Minerals giant Rio Tinto dominates the Pilbara region of Western Australia with its iron ore segment. The company exports iron ore on a massive scale but faces the structural problem that Western Australian ores are unsuitable for direct reduction processes because their iron content is usually below 67%. To offset this disadvantage, the group, under new CEO Simon Trott, is investing heavily in innovative processing capacities and high-grade overseas projects. Together with the specialist Calix, the company is building a demonstration plant for over AUD 35 million for the Zesty process, which combines electric heating and hydrogen reduction to convert fine ores into low-emission reduced iron. For 2025, Rio Tinto reported revenue of USD 57.64 billion and adjusted EBITDA of USD 25.36 billion. The company is currently one of the largest commodities groups worldwide. Yet even this industry giant is under pressure to transform.

thyssenkrupp: Restructuring and Bridge Solutions at tkH2Steel

As part of its ACES 2030 strategy, thyssenkrupp is undergoing a fundamental restructuring to become a financial holding company. The Steel Europe segment focuses on technologically advanced flat steel products for the automotive industry but is incurring restructuring costs and balance sheet provisions in the triple-digit range in the current 2025/2026 fiscal year. The groundbreaking Duisburg decarbonization concept, tkH2Steel, alleviates this pressure, as the new direct reduction plant can be flexibly started up using natural gas, thereby halving CO₂ emissions even without green hydrogen. The steel group secured EUR 2 billion in government funding for this major project. CEO Miguel López, whose contract was extended early through 2031, recently decided to spin off the marine division TKMS as an independent entity by selling a 49% minority stake. The goal: to strengthen TKMS's competitiveness and growth potential and drive the group's transformation into a financial holding company.

Strategic Resources: Industrial Platform at an Ice-Free Deep-Water Port

The Canadian commodities company Strategic Resources focuses on vanadium, titanium, and high-purity iron ore. The well-developed BlackRock project in the Canadian province of Québec combines the planned open-pit mining of a vanadium-titanium-magnetite deposit with a pellet plant at the deep-water port of Port Saguenay. A resource estimate for the Southwest deposit in accordance with the Canadian standard NI 43-101 shows proven and probable reserves totalling 127.8 million tonnes of ore with an in-situ grade of 40.2% Fe₂O₃ (iron oxide).

The extracted concentrate is then to be further processed into high-purity DR-grade pellets with an iron content of over 67%. The company's logistical advantage is demonstrated by the government-funded, CAD 111 million multi-user conveyor belt system located directly at the year-round ice-free port. As a development company with no operating revenue, Strategic Resources is a classic growth stock with a corresponding risk profile. Nevertheless, given the project metrics described and the structural demand situation in the steel industry, the medium-term outlook appears promising.

The Javelin Offtake Agreement and Strategic Commodity Partnerships

To guarantee financial liquidity during the start-up phase, Strategic Resources' management entered into definitive agency agreements with Javelin Global Commodities for a term of ten years from the completion of construction. This strategic alliance not only guarantees the full marketing of the DR pellets produced but also provides the company with up to USD 150 million in capital. In addition, a partnership with the private producer Tacora Resources secures the pellet plant access to up to 25% of the future capacity of the high-grade Scully Mine.

Conclusion: High After-Tax Net Present Value Justifies Further Upside Potential

Strategic Resources is gaining momentum in a market phase characterized by a growing number of acquisitions and partnerships in the steel sector. The bankable feasibility study from 2022 attests to the BlackRock project's compelling key metrics, with a projected after-tax net present value of CAD 1.93 billion and an internal rate of return of 18.2%. Since the share has recently been trading sideways, the question of a catalyst for rising prices arises. As soon as Strategic Resources takes further steps toward production, the market is likely to gradually price out risks. The stock is an exciting candidate for the watchlist. Deposits for the steel industry in secure jurisdictions remain in demand, as do the refined feedstocks derived from them. Strategic Resources occupies a promising niche.