The competitiveness of Chinese steel lies not only in the Chinese steel itself, but also in whether Chinese steel has sufficient iron ore resources.

Under the guidance of the idea of "mining is better than selling ore", China's steel has soared all the way for more than two decades, climbing from 100 million tons to 1 billion tons, forming a huge demand for foreign iron ore.

With the development of China's steel and the rising demand for iron ore, international mine prices are also dancing with the wind.

The world's three major ore giants have grown together with Chinese steel, and while meeting China's huge iron ore demand, they have also made a lot of money.

Rising international mine prices have also put Chinese steel companies under huge cost pressure, while international finance capital has taken advantage of soaring iron ore prices to impose imported inflation on China.

While solving the problem of technical jams, China Steel must also solve the neck problem of iron ore resources.

Iron ore is a commodity that is highly dependent on China, reaching 95% in 2017. Although the state has taken certain measures in recent years, the degree of external dependence has remained above 80%. Among them, imports from Australia account for more than 60% of China's total iron ore imports.

In 2020, China imported 1.17 billion tons of iron ore and spent 822.87 billion yuan, of which 731.7 million tons were imported from Australia, accounting for 62.5% of the total imports.

In 2021, the international iron ore price soared, once reaching a record of more than 1600 yuan / ton. China imported 11.2 tonnes of iron ore that year, down from the previous year, but spending soared to 1.2 trillion yuan, exceeding 1 trillion yuan for the first time, accounting for 7% of China's total imports of 17.4 trillion yuan that year.

In 2022, China imported 1.107 billion tons of iron ore, spending $128.097 billion.

Due to the excessive concentration of iron ore source structure, coupled with the excessive demand for iron ore in the era of China's incremental development of steel, and the low concentration of China's steel industry, it has caused the unfavorable position of Chinese steel in international iron ore price negotiations.

In order to change the current pattern of heavy dependence on Australian ore supply for iron ore, China Iron and Steel has strategically launched the "Cornerstone Plan" and established China Mineral Resources Group Co., Ltd. to accelerate its entry into the field of iron ore resources and ensure the security of China's steel supply chain.

The first is to accelerate the development of domestic iron mines. The most iconic event is the start of construction of the Angang Xianshan iron ore project, which marks the official start of construction of the largest single underground iron mine in China.

Xianshan iron ore mine has retained resources of 1.3 billion tons, with a designed annual output of 30 million tons of iron ore and more than 10 million tons of iron ore concentrate, and is scheduled to be put into operation in 2027.

The second is to continue to lay out Australian iron mines. China Baowu and Rio Tinto formed a joint venture for the Western Slope iron ore project in the Pilbara region of Western Australia.

Baowu and Rio Tinto have also entered into an iron ore purchase agreement, under which Baowu will purchase Rio Tinto's total of 126 million tons of iron ore products on a pro rata basis, for approximately 11.5 million tons per year.

The West Slope project has a design capacity of 25 million mt/year, with an average grade of about 62%, and is scheduled to start construction in early 2023 and be completed and put into operation in 2025.

The third is to speed up the advance into African iron ore. The cooperation between China Baowu and Win Alliance Simandou Holdings on the Simandou iron ore northern block project in Guinea marks the official "entry" of China Baowu into the Simandou northern project.

The Simandou North Project is the world's largest undeveloped iron ore deposit ever discovered, with an estimated high-grade iron ore resource of more than 2 billion tonnes. At full production, the Simandou project can export about 100 million tons of iron ore per year.

Simandou iron ore mine is a rare high-grade iron ore mine in the world, and its reserves are large enough to leverage the global iron ore supply pattern, which has great potential to break the price monopoly of international mining giants.

China Steel continues to extend its strategic supply chain, accelerate the control of overseas equity mines, and continuously improve the self-sufficiency rate of iron ore supply, thereby solving the problem of iron ore resource jams, which will give China Steel a stronger competitive strength.