Nation heats up domestic iron ore biz

Plans in place to enhance production, utilization to mitigate import reliance

China is expected to ramp up domestic iron ore sources while enhancing the utilization of scrap steel and housing more overseas mining assets to safeguard the supply of iron ore, a key raw material for steelmaking, experts said.

Domestic output of iron ore and scrap steel supplies will grow, mitigating the nation's reliance on iron ore imports, they added.

The Central Economic Work Conference held late last year called for efforts to speed up the building of a modern industrial system. The country will strengthen domestic exploration and production of key energy and mineral resources, accelerate the planning and construction of a new energy system, and improve its capability to secure nationally strategic material reserves and supply.

As a major steel producer, China has relied heavily on iron ore imports. Since 2015, around 80 percent of the iron ore China consumed annually was imported, said Fan Tiejun, president of the China Metallurgical Industry Planning and Research Institute in Beijing.

In the first 11 months of last year, the country's iron ore imports dipped 2.1 percent year-on-year to around 1.02 billion metric tons, he said.

China ranks fourth in iron reserves, though, the reserves are scattered and hard to access while output is mostly low grade, which requires more work and costs to refine compared with imports.

"China is at the forefront of steel production and is progressing to become a steel powerhouse for the world. Yet without secured resource supplies, that progress will not be steady," said Luo Tiejun, deputy head of the China Iron and Steel Association.

The association will work closely with relevant government authorities to explore domestic and overseas sources of iron ore while scaling up scrap steel recycling and utilization under the "cornerstone plan", Luo said at a recent forum on raw materials of the steel industry held by the institute.

Launched by the CISA early last year, the plan aims to raise the annual output of domestic iron mines to 370 million tons by 2025, representing an increase of 100 million tons over the 2020 level.

It also aims to increase China's share of overseas iron ore production from 120 million tons in 2020 to 220 million tons by 2025, and source 220 million tons per year from scrap recycling by 2025, which will be 70 million tons higher than the 2020 level.

Fan said as Chinese steel enterprises are stepping up utilization of short-process steelmaking technologies like the electric furnace, the country's demand for iron ore will decline slightly.

He estimates that China's iron ore import reliance will remain below 80 percent throughout 2025. He also said scrap steel recycling and utilization will gather momentum within five to 10 years, to increasingly replace the consumption of iron ore.

Meanwhile, as the country further tightens environmental protection and pursues green development, steel enterprises tend to build large blast furnaces, which will result in increasing consumption of domestically produced low-grade iron ore, he added.

The annual domestic iron ore output was 1.51 billion tons in 2014.It fell to 760 million tons in 2018 and then gradually increased to 981 million tons in 2021. In recent years, the annual domestic output of iron ore concentrates was around 270 million tons, meeting only 15 percent of the crude steel production demand, the CISA said.

Xia Nong, an official from the National Development and Reform Commission, said at the forum that it is a key task for China to speed up the construction of domestic iron mine projects, as the incompetence of domestic iron mines has become a major issue hindering both the development of the Chinese steel industry and the safety of national industrial and supply chains.

Xia also said that thanks to the improvement in mining technology, infrastructure and supporting systems, iron ore reserves that once were not feasible for exploration have become ready for production, creating more space for speeding up the development of domestic mines.

Luo, with the CISA, said that because of the implementation of the cornerstone plan, the approval for domestic iron mine projects is picking up and the construction of some key projects has accelerated.