Wang Hongren, chairman of Chinese steelmaker Hebei Steel Group, has stated that in the first half of the current year international iron ore prices were on the rise, but are expected to trend downwards towards the end of the current year amid the negative economic environment, though they are not expected to fall below $150/mt. Mr. Wang said that iron ore prices are not likely to decline too much based on the monopoly of the three global mining giants, i.e., BHP Billiton, Rio Tinto and Vale.
Mr. Wang added that, due to the continuous increases in iron ore prices, more and more state-owned, private sector and international investment capital has started to be poured into the Chinese mining industry. Thus, iron ore production capacity in China is expected to rise over the next three to five years.
At present, Hebei Steel Group owns a total of 5 billion mt of iron ore reserves. By the end of China's 12th five-year plan period (2011-15), Hebei Steel Group targets a total iron ore reserve volume of 8 billion mt, with an annual output of 35 million mt of iron ore concentrate. In addition, by the end of the period in question, Hebei Steel Group will be able to meet half of its demand for iron ore from its own resources, while it will purchase 10 percent from domestic suppliers, just 20 percent from the three global miners, and 20 percent from other small foreign miners.