Foreign mine development faces high cost iron ore pricing mechanism and strives for new breakthroughs

As for how to establish an iron ore resource security system, China will focus more on overseas.

“There is no shortage of ore in the world. The problem is that mineral prices do not have the right to speak. They can only use foreign minerals with foreign minerals. Therefore, we are now focusing on the development of foreign minerals.” November 19, Deputy Director of the Department of Raw Materials, Ministry of Industry and Information Technology Luo Tiejun said at the 7th Bohai Rim Iron and Steel Forum hosted by the China Logistics Technology Association, the Beijing Metal Materials Industry Chamber of Commerce, and Lange Steel Network.

"Daily Economic News" reporter learned that the development of foreign countries to increase efforts to do a good job of exploration and comprehensive utilization of resources, it is "iron and steel industry," the "Twelfth Five-Year" development plan" should have its meaning.

In fact, with the soaring prices of mineral resources, Chinese companies have also opened up overseas investment booms. Many central enterprises, including Chinalco, China Color, and China National Iron and Steel Group, began to move overseas, and private enterprises followed suit and began to “surge” into foreign mines.

According to public information, despite the gradual increase in domestic mine production, the main force supplying the steel enterprises is the imported mines whose prices have continued to be high. "If domestic iron ore can meet the production needs of quality and production, who will also spend a lot of money on imports?" On the same day, a conference trader at the above-mentioned meeting site told the "Daily Economic News" reporter.

The data shows that at present, China's iron ore importing countries are constantly increasing, and the number has increased from the previous 48 to 63.

It is reported that the average grade of domestic ore is only about 30%, which is significantly different from the 60% grade of Australian ore. “Because domestic minerals are mostly low in grade and are not well supplemented, their grade, pH, etc. should be suitable for their own furnace, but due to this change is particularly troublesome, some steel mills have no intention to transform equipment and upgrade technology.” Lange Steel Network analyst Zhang Lin said.

However, in terms of overseas iron ore exploration, China does not seem to have gone well. Luo Tiejun, deputy director of the Department of Raw Materials of the Ministry of Industry and Information Technology, recently told Daily Economic News reporters that in recent years, domestic companies have actively “goed out” and invested large amounts of financial, material, and human resources to explore and mine iron ore resources overseas. However, "for a variety of reasons, only a handful of truly effective projects are available."

In this regard, Deloitte Global Mining Leader Jeremy South said in an interview with the reporter of the “Daily Economic News” that in terms of mining investment, the biggest risk facing some Chinese companies is that they have not accumulated much experience, “although they are like big ones. Mining and energy companies such as Minmetals and Shenhua Group have accumulated experience, but this industry is a new activity for most companies."

It is reported that the Ministry of Industry and Information Technology is cooperating with relevant departments in researching and promoting foreign iron ore projects that are currently under construction and putting into operation to provide benefits as soon as possible. At the same time, it will guide investment companies to further strengthen communication and coordination with the countries where the resources are located, focus on resolving investment constraints, and jointly promote overseas iron ore mines. Stone resource base construction.

It is worth noting that, as the world's three major mining companies and other world giants have “ground up” in the world, the quality of ore left for Chinese companies will be less and less in the future, and even if Chinese companies can enter places like Africa, they will face mining. The cost has increased dramatically. "In addition to the project itself requires a lot of investment, the cyclical fluctuations in the industry, policy changes, as well as labor, environmental protection and other factors have increased the investment cost of the project, and this number is far greater than the assessment value." Zhang Lin said.

On the same day, Luo Tiejun also disclosed at the meeting that he will also make necessary efforts on the pricing mechanism. “Now is a good opportunity. We also want to look at the supply and demand. If we change a little, can we break through the new pricing mechanism.” It is reported that the price of imported ore that has continued to remain high has recently experienced a rare plunge, which has fallen by over 30 days. % has adversely affected both supply and demand.