China to lose iron ore supply monopoly by 2015

BEIJING, Mar 28 (Commodity Online): World's rare-earth monopoly China may lose its authority over another major raw material, iron ore as increased investment in the sector by major companies boost global production, said China Mining Association. Speaking at China Iron Ore 2011 conference, Wu Rongqing, chief engineer of the industry development department at China Mining Association said monopoly held on China's iron ore supply by a small number of international companies will be thoroughly broken up by 2015 as increased investment in the sector boosts global production, according to an expert in China's mining industry. The surging price of iron ore since 2003 has attracted a huge amount of investment in the sector, and there will soon be a concentrated release of capacity, breaking the monopoly a few big companies hold, reports The China Post. "In fact, the global iron ore reserve is so rich that it can satisfy consumption for the next 100 years," Wu said. Vale SA, Rio Tinto PLC and BHP Billiton Limited, the top three global suppliers of iron ore, have some high-quality ore, but they don't have all of the world's iron ore resources, he said. China will be less dependent on them, as it increases its own production and diversifies its import destination, said Wu. Domestic demand for iron ore has increased sharply over the past few years, triggered by the nation's rapid economic development. But the country's iron ore supply has not kept pace, resulting in dependence on imports, mostly from the big three iron ore miners. China, the world's largest iron ore importer and home to the world's largest steel industry, has complained that the big ore suppliers have been trying to force spot pricing on Chinese customers since Vale SA and Rio Tinto Group scrapped a decades-old annual pricing system in favor of a more flexible quarterly regime last year.