Full Article Link: China’s plan to end its Australian iron ore dependency (copyright link)

China’s plan to end its Australian iron ore dependency

China will boost domestic iron ore production by 30 per cent, significantly ramp up investments in overseas mines and strengthen scrap steel recycling under a plan designed to break Beijing’s dependency on Australia’s most valuable commodity export.

China’s top steel industry executives and senior government officials outlined a strategy for achieving the five-year targets in an article published this week, which highlights the Chinese government’s frustration with volatile iron ore prices and its desire to follow Japan’s lead by investing heavily in offshore mines.

China wants to wean its construction sector off its reliance on Australian iron ore within five years. Bloomberg

The article published in the state-backed Economic Daily singled out Australia and Brazil for dominating China’s imports of the steel-making ingredient.

“The control of overseas iron ore resources is obviously insufficient, and more than 80 per cent of the import volume comes from Australia and Brazil. The risks to resource security are prominent,” said Chen Ziqi, a senior executive at China International Engineering Consulting Corp, a major adviser to the Chinese government on investment and construction.

The move came as tensions between Australia and China over Peter Dutton’s warning about Taiwan escalated, with Beijing calling the Defence Minister “delusional” and warning Canberra it was going down the “wrong path towards the point of no return”. Speculation this week that China’s steel mills were preparing for an easing of production cuts as soon as next month also sent iron ore prices surging.