In terms of scale and magnitude, China's mining

Over the years, China has established a mining industry system with a complete range of departments including geology, production, construction, scientific research, design, equipment manufacture(jaw crusher), management, education and training.

Several of China's current mining operations are approaching ore reserve depletion, which has resulted in the need to locate and develop existing projects. This, coupled with a desire to encourage foreign investment in several sectors of the mining industry, makes China a highly prospective country.

China is the largest importer of iron ore in the world, accounting for about a third of the gloabal market. In 2003 iron ore production increased further to 122.7 Mt. Production of steel products reached 222.3 Mt in 2003, a 22% increase from 2002 making China the only country with annual steel production of over 200 Mt. Crude steel production increased by 21.2% in 2003 to 220.12 Mt. Output of pig iron increased by 19.7% to 202.3 Mt.

After four consecutive years of decline, China's production of iron ore in 2002 posted an increase of 108.8 Mt. Output during the first 10 months totalled 188 Mt, an increase of 6% compared with the corresponding period of 2001, and the country's state-owned, large-and-medium-scale enterprises, after having experienced continuous losses during the preceding ten years, began to make profits. Chinese demand for iron ore whether imported or domestically produced is the key determinant of the outlook for the global iron ore market in the short run. Crude steel production in China increased by 25% in the first quarter of 2004 compared to the same period in 2003. Iron ore production increased by 12% from 73 Mt to an estimated 82Mt with imports increasing by 48% in the same period.

China is the largest iron ore importer in the world and in 2003 imports increased by 33% (36.6Mt) to 148.13 Mt. The main suppliers were Australia (58.1 Mt), Brazil (38.4 Mt), India (32.3 Mt) and South Africa (9.6 Mt). Exports of steel products increased by 27% in 2003 to 7.0 Mt and Imports of steel products jumped by 52% to 37.2 Mt.Around 50% of iron ore production comes from mines located in Hebei and Liaoning provinces. The other provinces and regions that produce iron ore include Beijing, Shanxi province and Inner Mongolia.

The iron and steel industry in China has been stimulated by strong domestic demand, particularly from the construction industry, manufacturing and automotive sectors, hence the rapid growth of the iron and steel industry in recent years. In 2002, the government reduced the resource tax on iron ore by 40% for those vertically-integrated entities involved in both mining and metallurgical processing. The tax reduction was in line with the government's policy to promote integrated iron and steel operations, balance the tax burden among different enterprises and encourage competition.

In order to stabilise supply channels and reduce the cost of iron ore,, the Strategic Task Force for Import of Iron ore by Steel and Ore Entities was formed at the end of 2003. The task force will negotiate for better terms from suppliers, and will buy iron ore on behalf of Chinese consumers.

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