China is considering increasing domestic iron ore production in order to reduce dependence on imports within the next several years, according to recent statements, made by representatives of some leading local producers and the Chinese media.
So far, the China Steel Association (CISA) and some major local steel producers have already called on the Chinese authorities to provide support during implementation of their plans for a significant increase of domestic production of iron ore within the next several years.
He Wenbo, chairman of the China Metallurgical Association (CISA), believes there is a need to set a "national strategic goal" to provide up to 20% of domestic needs in iron ore by domestic production.
He also proposed to accumulate the revenues, generated from VAT,
imposed on iron ore imports to the country into the national iron ore fund, that will specialize on the funding of various mining activities in the country.
As part of these plans is also exempting from income taxes those metallurgical companies that invest in the development of new mines or increase production at existing fields.
At present China remains the world's largest consumer of iron ore. According to the country's customs authorities, the volume of iron ore imported by China in 2019 exceeded 1 billion tons. In 2020 the demand for ore from China exceeded 1.2 billion tons.
The recent deterioration of diplomatic relations between China and Australia, as well as the deterioration of the epidemiological situation in Brazil, once again brought the issue of the increase of ore production within the territory of China.
By: Eugen Gerden