Expert: Ensure that the iron ore self-sufficiency rate is above 50%, and strive to break the international monopoly

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Just as the new round of iron ore negotiation has just warmed up, the tentative release of international mines intending to raise prices by 30%-35% once again has a disagreement with the Chinese side. In this regard, Jiao Yushu, a consultant of the China Association of Metallurgical and Mining Enterprises, pointed out in Shanghai on the 29th that to enhance China's right to speak in negotiations, it is necessary to increase the self-sufficiency rate of iron ore and the scale of overseas equity mines. He revealed that from 2010 to 2015, China's iron ore production capacity will gradually increase by 300 million tons to 1.1 billion tons, to ensure that the self-sufficiency rate is above 50%, and it will initially have the material basis to break the international monopoly.

At the stalemate of the iron ore negotiation in the second half of this year, the news of the discovery of two super-large iron mines in Liaoning Dataigou (proved reserves of 3 billion tons) and Shandong Jining (predicted reserves of more than 5 billion tons) has been reported in China. "China is not short of iron ore." Jiao Yushu said that the national iron ore resource reserves announced by the Ministry of Land and Resources exceeded 60 billion tons, ranking among the top five in the world. According to him, at present, the domestic geological and mining department is still increasing its exploration efforts, and strives to double the existing iron ore resource reserves. At the same time, investment in mines is also accelerating. In 2007, an investment of 45 billion yuan was completed, and in 2008, an investment of 68.1 billion yuan was completed, an increase of 51%.

"According to the relevant plan, from 2010 to 2015, it is necessary to ensure that the new mines that have been put into production, under construction and project development will operate as soon as possible, and gradually increase the iron ore capacity by 300 million tons." Jiao Yushu said. By then, China's raw iron ore output will increase from 824 million tons in 2008 to 1.1 billion tons, and the corresponding iron ore self-sufficiency rate will reach over 50%, which will initially have the material basis for breaking international monopoly.

Previously, some people in the industry pointed out that due to the deep burial and low grade of domestic mines, it is difficult to break the monopoly of imported mines. Relevant figures also show that the current domestic lean ore reserves (grade 25%-40%) account for 98.4% of the total reserves, while the grades of Brazilian mines and Australian mines are generally as high as 56%-67%. "The reality forces us to use the poor ore as the rich ore." Jiao Yushu pointed out that China should strive to improve the level of beneficiation, so that the processed concentrate grade reaches 64%-69%. At the same time, relying on policy support and technological progress, the production cost of domestic iron ore is controlled within 500 yuan / ton. "In this way, domestic iron ore is also competitive in price compared with imported ore by long-distance shipping to China. of." 

On the other hand, China will also strive to expand the scale of overseas equity mines. In 2008, Japan imported 130 million tons of iron ore, and owned more than 70 million tons of overseas equity ore. While China imports 440 million tons of iron ore, it controls only 50 million tons. "For this alone, China will spend more than 10 billion US dollars more than Japan, which is why Japanese steel mills can tolerate soaring ore prices but China cannot." Jiao Yushu said. However, China's iron and steel industry has begun to awaken, and major steel mills such as Baosteel, Wuhan Iron and Steel, and Anshan Iron and Steel have gone abroad to open mines one after another. Farther afield, such as Africa, especially West Africa, are targets that can be considered.”

Earlier, the China Iron and Steel Association had proposed to establish a "China model" for iron ore imports. Jiao Yushu believes that according to the "China Model", domestic iron and steel enterprises should strictly implement the agency system and "uniform price" when importing iron ore. If supplemented by the increasing domestic mine production capacity and the scale of overseas equity mines, China will be able to create a new pattern of the international iron ore market and a safe and stable supply system for iron ore resources.