China said Asia’s largest iron ore deposit was discovered in northeast China, the South China Morning Post reported citing state media. The discovery, located at Dataigou in Liaoning province, has an estimated reserve of nearly 3 billion tons but the ore itself is located more than 1,200 meters below the surface making extraction difficult. However, the find could help China reduce its reliance on ore imports. Last year Beijing imported 444 million tons of ore which equaled nearly half its annual demand of 1 billion tons. While the discovery could also give China more leverage in its current iron ore price negotiations with Vale, Rio Tinto and BHP Billiton, there is some question as to whether the discovery was just negotiating ploy. Extracting ore from Chinese mines has a higher cost than those in Brazil and Australia. Zou Jian, the chairman of the China Metallurgical Mines Association also said that it might take three to four years before production could begin.
Categories