China to speed up iron ore projects to secure domestic supply

China’s state planner on Wednesday said it will accelerate the construction of iron ore exploration projects and improve its capability to ensure iron ore supplies.

The National Development and Reform Commission will also closely monitor iron ore market dynamics and take steps with relevant departments to limit irrational price increases, spokeswoman Meng Wei told a regular news briefing.

The government has been vexed about heavy dependence on imported iron ore, with more than 70% of China’s needs coming from overseas, and intends to increase domestic supply.

The government-backed China Iron & Steel Association began an initiative last year to boost domestic supply to 370 million tonnes by 2025.

China’s annual iron ore output is set to hit an eight-year high of 290 million tonnes in 2023, analysts estimated.

Consultancy Wood Mackenzie said domestic output may not increase much further in the near term given many new projects are underground mines and that complex geological conditions and high costs are likely to complicate construction.

The world’s largest iron ore consumer produced 44.50 million tonnes of iron ore concentrate in the first two months of 2023, showed data from the Metallurgical Mines’ Association of China.

(By Amy Lv and Dominique Patton; Editing by Christian Schmollinger and Christopher Cushing)