China's overseas iron ore output may top 70 mnt by 2025

China's overseas iron ore capacity has been expanding rapidly in the recent few years. By 2025, the total iron ore output from interests held by Chinese companies overseas is likely to exceed 70 million tonnes (mnt)/year, higher by over 60% compared to 2020, Mysteel finds.

Chinese enterprises have been actively exploring overseas iron ore resources since the China Iron & Steel Association (CISA) launched the Cornerstone Plan in 2022, as reported. One major target of the plan is to boost the country's overseas iron ore production capacity to 220 mnt/year by 2025, which translates to an increase of 100 mnt/y from 2020.

In fact, this goal has already been achieved, Mysteel's latest survey results showed, as the total capacity owned by Chinese enterprises among the 22 key iron ore mining projects overseas has exceeded 220 mnt by now. These capacities are primarily distributed across Africa, Australia, and South America, Mysteel Global noted.

Of the 22 tracked iron ore mining projects, only 12 have been put into operation, where Chinese equity capacities add up to just around 80 mnt, according to the survey.

Moreover, "the current capacity use of these operational projects is relatively low, since some mines with large capacities have just started production this year," a market analyst in Shanghai explained. Mysteel estimates that China's total equity output of iron ore from overseas mines will reach 63.4 mnt in 2024, higher by some 19.6% on year.

Some currently operating mines are still in the initial stages of production, and their output is likely to grow more rapidly next year. Besides, another three projects with a total capacity of 38.7 mnt/y under Chinese equity are scheduled to commence production in 2025, including the prominent Simandou mine in West Africa, Mysteel Global has learned.

As such, Chinese-owned equity iron ore output from overseas mining projects is expected to post a significant rise by some 50% on year in 2025, according to Mysteel's estimation.

As China's overseas iron ore production gradually increases, the stability of the country's iron ore supply will continue to strengthen, helping reduce its dependence on imported iron ore for domestic steelmaking in the longer term, market sources believe.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.