Beijing: A global spike in the price of iron ore has pushed China into resuming the search for domestic deposits after a 10-year break, state media reported on Thursday.
The ministry of land and resources is about to launch a new nationwide survey of iron ore reserves, the China Daily said, days after China agreed to a 65% hike in the contract price of iron ore.
“(We will be) focusing on the vast central and western areas of the country in a bid to boost supplies,” the paper quoted Wang Min, vice-minister of land and resources, as saying.
Geological prospecting teams virtually stopped looking in the 1990s, as known reserves were considered sufficient to last for 300 years, according to the report.
However, that optimistic projection was based on demand levels at the time, and did not take into account the massive growth of the Chinese economy since then.
China’s economy has expanded by double-digit figures for five consecutive years, leading to a huge increase in its demand for basic raw materials.
“Now our supplies are dwindling,” Wang said.
He said that while China has abundant reserves of iron—60 billion tonnes have already been discovered—high-grade ore was still relatively scarce.
China has come under enormous pressure on prices because the supply is controlled by a few giant companies.