May 25, 2020 / 8:27 AM / 2 months ago

China steel body, producers call for domestic iron ore output boost

BEIJING, May 25 (Reuters) - China’s steel association and major steelmakers have called for an increase in domestic iron ore production as well as greater investment in exploration overseas to ensure supplies.

He Wenbo, chairman of the China Iron & Steel Industry Association, recommended at the Chinese People’s Political Consultative Conference (CPPCC) in Beijing that China should set a “national strategic goal” of keeping its domestic iron ore output at more than 20% of total demand.

China is the world’s top iron ore consumer, with its demand set to hit 1.225 billion tonnes in 2020, according to a government think tank. But it has a heavy reliance on imports, having shipped in 1 billion tonnes of ore in 2019.

He, a delegate at this year’s CPPCC, proposed that revenue from a value-added tax levied on iron ore imports be channelled into a national iron ore development support fund to strengthen investment in domestic mines. These tax revenues amount to around 90 billion yuan ($12.61 billion) annually.

He also suggested that steel firms investing in new mines or expanding production at existing deposits should be exempted from income tax.

“(We should) continue to actively promote joint investment and cooperation with mainstream miners while also focusing on undeveloped resources in Africa and Canada,” He said.

Separately, Cao Zhiqiang, chairman of Hunan Valin Iron & Steel Group and a delegate at the National People’s Congress (NPC), proposed expanding financing channels for special funds used in overseas resource exploration.

China should offer favourable tax policies to companies investing overseas to help them avoid double taxation, state media reported.

Another NPC delegate, Ansteel Group chairman Tan Chengxu, proposed speeding up formulation of an iron ore resources security strategy and urged strong support for exploration of domestic ore, according to a company statement on Monday. ($1 = 7.1374 Chinese yuan renminbi) (Reporting by Min Zhang and Tom Daly; Editing by Simon Cameron-Moore)

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