In June 10th, U. S. media reported that mining companies faced a new challenge as they recovered from the downturn: China, who bought 2/3 of the world's iron ore, was increasingly picky about the type of iron ore it needed.
According to the Wall Street journal website in June 4th, the price difference between high iron ore and low iron ore has doubled in the past two years, prompting the mining company to rethink its strategy, but in the past, all types of iron ore were well sold in Asia.
The report says that the expansion of the price gap is the result of the transformation of the Chinese steel industry into a larger, greener plant, which is more inclined to use high quality iron ore.
The report also said that China has forced the closure of some old steel mills, which usually use cheaper iron ore, with only 58% iron, which have polluted some cities in China very seriously.
The report points out that low - quality iron ore produces more haze because it takes much more coal than the high - quality iron ore containing 60% or more iron.
In order to reverse the situation, Fuentes Cu metal group has made a plan. The world's fourth largest offshore iron ore producer said last week that it will invest more than $1 billion to build a new Eliwana mine in remote western parts of Australia. The company hopes that most of its iron ore exports will not be less than 60% in the future.
The Cleaves Natural Resources Corp is also trying to protect its profits, which has closed down its low - quality iron ore business in Australia and will concentrate on producing high quality ore in Michigan and Minnesota.
According to the report, it is not easy for some mineral company to adapt to the changes in the Chinese market, which account for about 1/5 of the total global shipments of these companies. It may take several years and billions of dollars to build a new mine. However, in order to improve the quality of ore without the construction of new mines, the companies must either reduce the shipments or have to stop the mining of some mines earlier than planned.
The Fuentes Cu metal group aims to put the new Eliwana mine into operation by the end of 2020, but the company hopes to start high quality iron ore sales as soon as possible, Gaines said that in 2019, the company will start supplying small quantities of high quality new ores from existing mines, so as to win consumers at an early date.