China's iron ore discovery worries Indian exporters

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jun 2009

The recent discovery of iron ore in northwest China may pose a threat to India’s iron ore exports to the Communist country. India’s exports to China are mainly iron ore. Following a recent tax Indian iron ore exports have been crying foul as they felt this will hit their exports badly. To ass to that now China has declared huge iron ore deposits.
Beijing also heavily depends on iron ore supplies from India, Australia, Japan and South Korea to feed its high speed industrial growth.
However, the situation is likely to change soon with Chinese geologists discovering Asia’s largest iron ore deposit in northwest China.
Bureau of Geology and Mineral Resources Exploration in Liaoning Province has announced it has found iron ore deposit with an estimated reserve of more than 3 billion tonnes.
It will take some time before any of the ores is actually mined but it is good news for the planners in the National Development and Reform Commission in Beijing, who maps the long-term trajectory of development.
The iron content in the ores, which is an important aspect for the steel industry, ranges between 25% and 62%. Apparently, the quantum of low-grade iron ore is higher than the high grade ones at 60-62% per cent. But China has already impressed upon the world with its capacity to upgrade low-grade iron ore through certain industrial processes.
The deposit can be exploited for more than 50 years. High-grade iron ore was also found even at a depth of 2,015 metres. But most of deposit is available at depths of 1,200 metres to 1,860 metres and spanning an area of 4 km by 3 km. The iron ore deposit is a mixture of magnetite and hematite.
The Benxi municipal government hailed it as Asia’s largest deposit. China’s minister of land and resources Xu Shaoshi has urged the local authorities to start exploitation as quickly as possible. News of the discovery has given a boost to share prices of steel makers like Baosteel, Angang Steel and Hunan Valin Iron and Steel Group.
Going by its current level of usage, the deposit is enough to satisfy China’s requirement of iron ore for 25 years. The province has yielded good quantities of iron ore in the past.

Source: Commodity Online