LONDON, December 8, 2017 /PRNewswire/ --
In China's fight against pollution, The Metallurgical Mines' Association of China (MMAC) recently announced that it will withdraw more than 1,000 licenses from iron ore miners in the country. Contrary to media reports, our analysis show that this measure will have little impact on the Chinese iron ore industry.
Brief overview of iron ore mining in China
China is a country with plenty of iron ore reserves. However, almost all of the reserves consist of magnetite with an average iron content of~30%. In comparison, the largest iron ore producers in the world all mine reserves that consist of hematite and contain around 60% iron. As a result of the low Fe content, Chinese iron ore requires beneficiation to raise the iron content to levels suitable for sintering or pelletising. After beneficiation, Chinese domestic iron ore production consists mostly of concentrate with an iron content of ~64-66%. CRU estimates that, currently, around 68% of the concentrate is used in sinter plants and 32% in pellet plants.
Historically, the Chinese steel industry obtained most of its iron ore from domestic sources. However, as Chinese steel production increased rapidly in the early-2000s, domestic iron ore production was not enough to supply the country's booming steel industry. Today, China obtains only 19% of its iron ore from domestic production - a figure that CRU expects to fall to 15% in 2021, as lower iron ore prices continue to force high-cost Chinese producers from the market.
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CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
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