Mining Equipment and China's Iron Ore Assets

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According to estimation of the country's leading steel information provider this weekend, China is expected to own rights in more than 100 million tonnes of overseas iron ore assets next year.

The Beijing based Lange Steel Information Service said the estimation has included assets owned by Chinese firms following the purchase of China's Hunan Valin Iron and Steel Group in Australian mining company Fortescue Metals Group.

Hunan Valin purchase in Australia's third largest iron ore producer has been approved by the National Development and Reform Commission, but the deal still needs further approvals from the Ministry of Commerce and the State Administration of Foreign Exchange. The deal if secured would ensure a yearly iron ore supply of 10 million tonnes for Hunan Valin from FMG.

Lange said six Chinese steel producers, including Baosteel, Sinosteel and Hunan Valin have each secured rights in an annual supply of more than 10 million tonnes of overseas iron ore assets. It said another four producers have obtained a combined supply of 12 million tonnes of iron ore from overseas suppliers.

Mr Wang Guoqing a Lange analyst said about 80% of China's overseas iron ore supplies are in Australia which have been obtained through stake purchases, purchases of assets joint ventures and joint development.

China imported 443.56 million tonnes of iron ore in 2008, bringing the country's reliance on imported iron ore to around 50%.