Ansteel Mining, China’s top iron ore mining company, calls for the country to nurture more iron ore mining giants for “industrial security and sustainable iron ore supplies to the domestic steel industry”, Wang Zhizhong, vice president of Ansteel Mining Co said at the 18th China International Steel & Raw Materials Conference 2018 on September 20.
“The global iron ore trading has been with serious monopoly, and China, being the world’s top steelmaker and iron ore consumer, has no pricing power in iron ore,” Wang said at the event in Dalian, Northeast China’s Liaoning province.
China, however, is by no means short of iron ore deposits, as the proven resources nationwide add up to 85 billion tonnes but they are with low exploration and utilization rates due to the bottlenecks of technology and management, he pointed out, though admitting that most of China’s iron ore deposits are with low Fe content averaging 15-30%, with other minerals co-existing, and so deep underground of up to 1,000 m.
All the challenges are conquerable by enhancing the industry’s concentration level and nurturing domestic sizeable iron ore mines including a few giants with advanced mining and processing technologies, which, however, will largely rely on “Beijing’s willingness to provide aids such as policy support and cutting the taxations on domestic mines down to the level of their international rivals,” Wang suggested.
China's mining licenses are huge in number at 3,910, but those with 10 million tonnes/year run-of-mine (ROM) designed capacity are less than 10, those above 2 million t/y account for 4.9% of the total, 9.5% with their capacities ranging 600,000-2 million t/y, and the dominant majority of 85.6% are below 600,000 t/y, according to him.
Besides, the taxation on China’s iron ore mining was at 20.1%, or three-four folds of their overseas competitors despite that the former declined from 2014’s 28%.
Lei Pingxi, chief engineer of the Metallurgical Mines’ Association of China (MMAC), shared the view, disclosing in his presentation that China has been progressing with shutting down outdated, substandard and unsafe mines in the past few years, and as of 2018, mining companies that are still in operation total 1,521 in number, down dramatically from the 4,262 in 2010. Mining company needs to have a license for each of their mining sites.
Over January-July, China’s ROM iron ore output fell 1.8% on year to 447.2 million tonnes and concentrates down 7% on year to 135.5 million tonnes mainly because of their lack of competitiveness and widespread mining safety and environmental protection inspections, according to him, while the country’s iron ore imports remained high at 620.7 million tonnes despite a 0.7% year-on-year decline.
Written by Hongmei Li, li.hongmei@mysteel.com