China intends to build one or two globally significant overseas iron ore mines by 2025 in order to increase the supply of ingredients for steel production and strengthen its pricing policy, according to the Industry Ministry.
According to the five-year plan for the steel sector, published by the Ministry of Industry and Information Technology (MIIT), the share of Chinese companies in overseas mines is expected to account for more than 20% of iron ore imports by this year.
The plan, which is open for public comment until January 31, also calls for an increase in the supply of other mineral resources for steel production, such as manganese and chromium.
China, the world’s largest steel producer, currently relies on imports for roughly 80% of its iron ore, but it is not known how much of this comes from overseas mines in which it owns stakes.
It has in-house mines with grades far below leading producers such as Brazil and Australia, and has a stake in the Simandu mine in Guinea.
“China will accelerate the construction of large iron ore projects in West Africa and Western Australia,” MIIT said, adding that cooperation will also be strengthened with resource-rich Russia, Kazakhstan, Mongolia, Cambodia and other neighboring countries.
China will also accelerate mergers and acquisitions in the steel sector and will form several “world-class” steel groups, the ministry said.
The top five Chinese steelmakers are expected to account for 40% of total steel production in China by 2025, while the top 10 steelmakers will account for 60%, up from 37% now.
New steel production facilities in China will be strictly banned, and new steel projects in coastal areas are “in principle” not allowed, MIIT said.
Electric arc furnaces, which mainly use scrap steel as raw materials, should provide 15-20% of steel production, he added.
The document says that MIIT, which jointly issued a statement on Thursday authorizing the import of high-quality steel scrap from January 1, aims to increase its annual supply of domestic steel scrap to 300 million tons.