What’s new: China’s top economic planner said this week that it met with iron and steel industry groups as part of plans to reduce the country’s dependence on foreign iron ore — over the next couple of decades.
Representatives from the National Development and Reform Commission (NDRC), the China Iron and Steel Association (CISA), and the Metallurgical Mines’ Association of China recently discussed accelerating the construction of domestic iron ore projects under CISA’s “Foundation Plan (基石计划),” the NDRC said in a Monday post.
As part of the Foundation Plan, Chinese companies will source more iron ore from domestic producers and gradually slash imports over the next 10 to 15 years, the CISA told the state-owned Xinhua News Agency in March.
In the short term, it means increasing the amount of iron ore it sources from local mines to 370 million tons by 2025, up from 270 million tons in 2020. It also means recycling more scrap steel and increasing imports from overseas mines in which Chinese firms hold a stake.
But an industry source cast doubt on the feasibility of the timetable, pointing out domestic iron ore producers have to spend great time and money to expand their capacity. In the past decade, close to zero iron mine projects have received fresh investment for exploration and development, the source added.
Background: China is the world’s largest iron ore importer. In 2021, imported iron ore accounted for nearly four-fifths of the country’s consumption, according to the CISA.
That year, China paid a record-high $164 per ton for imported iron ore, on average, representing a nearly 62% jump, as a recovery in the global economy led to greater demand for steel, figures from the General Administration of Customs showed.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)
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