China plans to boost its self-sufficiency rate of iron ore to more than 45 percent by 2015, a move that intends to protect the country's steel industry from a foreign monopoly over iron ore, the Economic Information Daily reported Monday.
China will also aim to own 50 percent of foreign iron ore resources it imports by 2015, the report said, citing authoritative insiders from the China Iron and Steel Association.
China, the world's biggest consumer of iron ore, has been stepping up domestic production of the mineral and increasing overseas investment to secure supplies as its steel firms, mainly dependent on imports, have been subject to price fluctuations.
The world's top three producers, Vale SA, BHP Billiton and Rio Tinto control two-thirds of the world's iron ore exports and have a say in global ore prices.
Whether China is able to guarantee the iron ore supplies matters to the development of the country's steel industry, the report said, citing Luo Tiejun, deputy director of the raw material department with the Ministry of Industry and Information Technology (MIIT).
China imported 618 million tonnes of iron ore in 2010, taking up more than 68 percent of its consumption. In the first eight months of this year, China imported 448 million tonnes of iron ore, up 3.5 percent year-on-year, according to MIIT.
The average price in the period increased by 38 percent from the same time last year to reach 163.75 U.S. dollars per tonne. The price increase added 130 billion yuan (20.47 billion U.S. dollars) in costs for China's steel firms, the report said.
The profit ratio of medium and large steel enterprises is 3 percent, lower than the 6 percent of the industrial sector in China, the report said.
"The international monopoly has pushed the price of iron ore more quickly than the growth of steel prices," said Zhu Jimin, president of Shougang Group.
Luo said MITT has worked with other ministries to establish a guarantee and coordination mechanism for iron ore supply and will continue to step up domestic exploration and mine consolidation.
The ministry has also been encouraging Chinese companies to promote the construction of overseas iron ore bases, especially in neighboring countries, he added.
China is expected to add more than 100 million tonnes in iron ore capacity abroad by 2015, according to the 12th five-year plan on the country's steel sector published Monday on MIIT's website.
The country's annual crude steel consumption will reach around 750 million tonnes by 2015, according to the plan.