The China Iron and Steel Association (CISA) has just submitted to China's State Council its proposal for new policies to support domestic mines, an important part of which is the further lowering of taxes for domestic mines. The CISA and the Metallurgical Mines Association of China are proposing that the VAT for mines should be reduced from 17 percent to 13 percent and that the resource tax should be lowered from RMB 9/mt to RMB 6/mt, with the resource compensation fee and VAT being combined into one.
The huge volume of imported iron ore in China has been seriously squeezing the market share of domestic ore. Most privately-owned steel mills have sharply cut or even halted purchases of domestic ore on account of the high grade and low price of the overseas iron ore.