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Rights to overseas ore assets

CHINA is expected to own rights to more than 100 million tons of overseas iron ore assets next year, according to an estimate by the country's leading steel information provider over the weekend.

The estimation includes assets owned by Chinese firms following China's Hunan Valin Iron and Steel Group's purchase in Australian mining company Fortescue Metals Group, said Lange Steel Information Service, an online information provider.

Hunan Valin's purchase in Australia's third-largest iron ore producer has been approved by the National Development and Reform Commission, but the deal still needs further approval from the Ministry of Commerce and the State Administration of Foreign Exchange.

The deal, if secured, would ensure an annual iron ore supply of 10 million tons for Hunan Valin from Fortescue.

Beijing-based Lange said six Chinese steel producers, including Baosteel, Sinosteel and Hunan Valin, have each secured rights for an annual supply of more than 10 million tons of overseas iron ore assets. Another four producers have got a combined supply of 12 million tons of iron ore from overseas suppliers, according to Lange.

Wang Guoqing, a Lange analyst, said about 80 percent of China's overseas iron ore supplies are in Australia, which have been obtained via stake purchases, buying of assets, joint ventures and joint development.

China imported 443.56 million tons of iron ore last year, bringing the country's reliance on imported iron ore to about 50 percent. About 20 percent of China's imported iron ore is actually owned by domestic firms, while the percentage for Japan and European countries is about 60 percent, according to Lange.


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