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Posts Tagged ‘import’

China to invest in iron ore mines abroad

February 24, 2011 1 comment

“China plans an aggressive expansion of its iron-ore holdings overseas to increase the share of its imports from China-invested mines, an influential industry official said Wednesday. China Iron & Steel Association Vice Chairman Luo Bingsheng told an industry conference Wednesday that China would seek to derive 40% of ore imports from Chinese-invested sources by 2015.

It is unclear what percentage of China’s iron-ore imports currently come from mines part-owned by Chinese companies. Mr. Luo didn’t give a figure. But the comments from Mr. Luo, who is to retire from the association this week, underscore the desire of China—which produces about half of the world’s steel—to reduce its import bill for iron ore, a feedstock that it paid $80 billion to import last year.”

Source: Wall Street Journal, February 23 2011

Observations:

  • China produces about half of the world’s steel, but produces only 15% of the world’s iron ore (in iron content). The remaining ore required for steelmaking is imported, mainly from Australia, Brazil, and India.
  • China’s share in mining M&A rose from 22% to 25% ($12bln) last year according to Ernst & Young’s latest report. In the last years more than half of China’s acquisitions took place in Australia.

Implications:

  • BHP Billiton, Rio Tinto and Vale together control some 75% of the global seaborne iron ore trade. If China wants to derive 40% of ore imports from Chinese-owned sources by 2015 it will either have to increase its stake in the three major iron ore producers or erode their share by investing in other growing companies.
  • To strengthen the position in iron ore imports the Chinese steel makers, backed by the government via development funds and banks, will have to look beyond Australia to Africa and Latin America. The industry in Australia is rather consolidated, while new deposits developed in Africa might enable China to secure long term supplies.

©2011 | Wilfred Visser | thebusinessofmining.com

EU to step up raw materials diplomacy

June 18, 2010 Comments off

European Union Raw Materials Initiative“An EU expert group has identified 14 raw materials seen as “critical” for EU high-tech and eco-industries and suggested that the European Union’s global diplomacy should be geared up to ensure that companies gain easier access to them in future.

‘It is our aim to make sure that Europe’s industry will be able to continue to play a leading role in new technologies and innovation and we have to ensure that we have the necessary elements to do so,’ said Industry Commissioner Antonio Tajani, presenting the group’s final report on 17 June. …

To guarantee that industry can access these essential raw materials, ‘we need fair play on external markets,’ said Tajani. Encouraging supply from EU sources, improving resource efficiency and increasing efforts to recycle were also highlighted in the report as ways forward.”

Source: Euractiv, June 18 2010

European Union Report: Raw Materials Initiative

Observations:

  • The European Union has realized 30 million jobs in Europe directly depend on availability of mineral resources.
  • Antimony, beryllium, cobalt, fluorspar, gallium, germanium, graphite, indium, magnesium, niobium, PGMs (Platinum Group Metals), rare earths, tantalum and tungsten are deemed to be critical for the industry in Europe. Most of them are used especially in the high tech industry.
  • The report concludes that the EU should respond to the threat of lack of supply by ensuring access to raw materials from international markets under the same conditions as other industrial competitors; setting the right framework conditions within the EU in order to foster sustainable supply of raw materials from European sources; and boosting overall resource efficiency and promoting recycling to reduce the EU’s consumption of primary raw materials and decrease the relative import dependence.

Implications:

  • European deposits of the critical raw materials are low, so the fostering of sustainable supply will not affect many companies (although some minor producers in Eastern Europe might benefit).
  • The key result of the study will be that the European Union will support manufacturers in closing long term deals with major producers of critical materials. The EU will follow China, Russia and Japan in negotiating favourable contracts, most likely promising trade benefits or even infrastructure investments in return. The official term for these actions is “Joint Dialogue”.

©2010 – thebusinessofmining.com

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