China to accelerate work on iron ore projects in Australia and Africa

China reportedly plans to build at least two “globally significant overseas iron ore mines” to boost supply, by 2025.

The move is part of the country’s plans to boost supply of the metal and increase its pricing capacity, Reuters reported citing the Ministry of Industry and Information Technology (MIIT).

According to a five-year plan for the steel sector published by MIIT, capital production from Chinese company stakes in overseas mines should constitute more than 20% of iron ore imports by 2025.

The five-year plan will await public comment until January 31st. The plan also calls for a greater supply of other steel resources such as chromium and manganese.

China is the world’s largest steel producer. Currently, the country depends on imports for almost 80% of its iron ore. However, there is no certainty about how much of that comes from overseas mines in which the country owns stakes.

China has domestic iron ore mines with a much lower grade compared to major producers such as Brazil and Australia. The country has a stake in Guinea’s Simandou mine.

Reuters quoted MIIT as saying: “China will accelerate the construction of large iron ore projects in West Africa and Western Australia.”

The ministry also noted that China will accelerate mergers and acquisitions (M & As) in the steel sector, leading to the creation of many “world-class” steel groups.

By 2025, China’s top five steel producers are expected to account for 40% of the country’s total steel production.

MIIT added that new steel production will be strictly restricted in China and that new steel projects in coastal areas are not allowed “in the beggining.”

In August this year, the Indian government restricted the participation of China and other countries that share land borders in commercial coal mine auctions.

Source: World Energy Trade.