(Yicai Global) March 3 -- China will boost domestic iron ore production 37 percent by 2025, compared with two years ago, to ensure stable supply and prices to its steel sector, according to an industry group.

The China Iron and Steel Association will launch a cornerstone plan this year to hike iron ore production to 370 million tons by 2025, which is 100 million tons more than in 2020, Vice Chairman Luo Tiejun said in an interview published on the association’s website.

The CISA also plans to increase steel scrap consumption in China’s iron and steel industry to 300 million tons in 2025 from 230 million tons in 2020, and Chinese steelmakers’ output of iron ore abroad to 220 million tons from 120 million tons in the same period, Luo added.

China aims to reduce its dependence on iron ore imports over a 10- to 15-year period, according to the plan.

The country brought in more than 1.1 billion tons of iron ore last year, contributing to as much as 61 percent of the total crude steel made in 2021. Domestically-produced refined iron powder and steel scrap consumption tallied 285 million tons and 230 million tons, with a contribution rate to the production of crude steel of 16 percent and 20 percent, respectively.

China’s crude iron ore output exceeded 1.5 billion tons in 2014, Luo said, noting that the target set in the cornerstone plan is achievable as domestic resources have strong development potential based on mine data.

After peaking in 2014, China’s output of crude iron ore fell rapidly, barely reaching 760 million tons in 2018, according to Luo. This led the yield of domestically-produced refined iron powder to drop to about 270 million tons in recent years, contributing to only about 15 percent of the total output of crude steel, he added.

“The cost of iron ore concentrates in some of China’s major mines fell to below USD60 per ton in recent years amid comprehensive measures such as new technologies and smart management, achieving a certain market competitiveness,” Luo said.

“The bigger issues faced by the industry in developing new iron ore projects are the long government review process, various policy restraints, high taxes and fees, and relatively poorer iron ore quality and higher development costs than overseas,” he noted.

The CISA first mentioned the cornerstone plan at a conference in early January, but did not provide any details at that time. The industry group only said that it had already submitted the plan to the government and was seeking policy-related support.

Editors: Tang Shihua, Futura Costaglione