China is considering cutting taxes for domestic iron ore
miners, State media reported Tuesday, as mining firms in the world's top
consumer of the ore struggle to compete with overseas rivals.
The Ministry of Industry and Information Technology will work with the Ministry
of Finance and other parties on a proposal to cut the current total tax rate of
around 25 percent by up to half, the China Securities Journal, a daily
newspaper published under the administration of the Xinhua News Agency,
reported Tuesday without citing sources.
Domestic iron ore miners have been burdened by high production costs and have
failed to compete with Australian miners including Rio Tinto and BHP Billiton,
forcing the country's big steel makers to rely heavily on imported ore.
Industry sources estimated that the average cost of producing domestic iron
ore, most of which is of a grade as low as 20 percent, ranges between $90-$100
per ton, compared with around $30-$50 per ton for Australian miners.
So, once the taxes for domestic miners are cut, they will be
able compete against other major suppliers like Australia & Brazil.
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