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Report says half of China iron ore miners stop producing because of cheap imports.

Issued at 2011-12-05



Interfax-China reported that about half of China iron ore miners – mainly small and medium-sized firms – have suspended production in the face of dwindling profit margins due to the low price of imported ore.

Zhao Peng industry consultant told Interfax iron ore grading 66%in Tangshan is priced around CNY 950 per ton at present, but domestic miners need a price of about CNY 1,000 to break even.

Over the weekend Reuters reported Rio Tinto chief executive Tom Albanese said “assumptions that the floor price would not go much below $120 a tonne might be valid next year but not long beyond that.”

The less than optimistic outlook from the world’s number two miner comes at the end of a week which saw iron ore prices drop more than 10%, almost wiping out the gains witnessed since October, when iron ore gave up $60/tonne signalling a sea change in the market.

Read more on the changing iron ore market.

MINING.com reported in September China plans to dramatically consolidate the number of mines in its country, according to Caterpillar (NYSE:CAT) and a study by MCCM. And China also wants its mines to be a lot more productive. In 2004 China had 25,000 operating mines. By the end of 2013 China wants to get that number down to 4,000 mines. A minimum production of 300,000 tonnes per annum will be required for mine approval.


Source: Mining



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