China leads the world in the consumption of iron ore, a key element of the steel-making process. Demand is increasing as industrialization expands and new domestic infrastructure construction projects get underway.
Last year, China imported 618 million tons of iron ore, largely from only four countries – Australia, Brazil, India and South Africa. In order to break its dependence on the world’s “Big Three” global miners (BHP Billiton, Rio Tinto and Vale), China is accelerating investment into new mining projects in West Africa. In total, estimates say nearly 250 million tons of iron ore could be produced every year over the medium to long term.
Chinese iron ore imports in 2011 are predicted to rise 8% from last year’s total. Prices for iron ore with 62% iron content have risen by one-third over the past year, and doubled over the past two. Acquiring new supplies is crucial for large ore importers like China.