China’s Ministry of Natural Resources has set an action plan to enhance the exploration of strategic bulk minerals across the country this year, aiming to further consolidate domestic mineral prospecting and ensure the security of the country’s mineral resources, stated its minister Wang Guanghua on Sunday when attending the sidelines of “Two Sessions” – annual meetings of China’s top legislature and its top political advisory body.
China still relies heavily on imports from other countries in terms of some major minerals, and the country must ramp up its mineral exploration to meet the rapidly growing demand among domestic users, Wang warned.
For example, China’s dependence on iron ore stands as high as 80%, with imports coming from only a few sources. This situation not only threatens the security of the country’s industry chains, but also squeezes profit margins among domestic steelmakers, Mysteel Global learned.
China’s Ministry of Natural Resources will introduce a series of policies to draw more social investments into the exploration of mines with large mineral reserves and high content grade, according to Wang.
Also during the “Two Sessions”, Zhao Minge, chairman of Shougang Group and a National People’s Congress (NPC) deputy, pointed out last Thursday that in recent years, the tax and fee burden rate incurred by Chinese iron ore miners on iron ore concentrates was around 22.12% (excluding the VAT), much higher than the rates of 4.5% in Australia and 10% in Brazil.
China could further adjust the structure of value added tax, reduce the tax on low-grade iron ore, and refine the scope of tax collection on iron ore, suggested Zhao. This will help enhance the market competitiveness of domestic iron ore mining companies, he noted.
Meanwhile, technical support is crucial to mineral prospecting, Wang added, so the ministry will accelerate exploration technology innovation and advance domestic research and development of high-precision mining equipment.
Wang also mentioned that it is necessary to adjust the methods for collecting income from the transfer of mineral rights. The income should be collected annually based on mines’ “real sales revenue”, he illustrated.
Written by Anthea Shi, shihui@mysteel.com
Edited by Alyssa Ren, rentingting@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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