F REIGN TRADE - 中国国际贸易促进委员会

Industrial WatchENERGYSeveral iron ore exporting countries raised tariffsIndustrial WatchIt is learned from oversea reports that, Indonesia launched a20% tariff on 14 mineral products including iron ore sinceMay 6th. It is reported, in addition to Indonesia, other countrieswill lift tariffs or limit the export of mineral resources.Among them, India, Vietnam will increase iron ore exporttariffs, and Australia will levy carbon tax and mineral resourcerent tax since July 1st, said National Business Daily.An industry participant said during an interview withNational Business Daily, rising taxes will not only bring ahigher cost to Chinese steel enterprises, but also restrain theirinvestments in oversea mineral resources. “China has realizedthe necessity to invest in oversea mines or acquire ore miningrights, but at the same time, resource protection consciousnessin foreign countries is gradually strengthening.”This is impeding Chinese steel enterprises’ “overseasmine acquisition”. In recent years, to break the monopoly ofthree leading ore traders, Chinese steel enterprises have triedto diversify the sourcing channel, and made some progress.According to Lange Steel Information Network, althoughAustralia is still a major exporter of iron ore, the first twomonths of 2012 witnessed an increase of African ores, withthe ratio up from 6.04% at the same time in 2011 to 6.95%.Meanwhile, imports of South American ores increasedslightly, up from 24.27% to 25.92%.“As the three leading miners monopolize global ironore market, China try to break the monopoly by expandingimports of other ores. However, when more and morenon-traditional countries begin to limit exports of mineralmeasures, China will encounter challenges.” Umetal iron oreanalyst Tang Jing said.Comment With many countries carrying out in succession policies to increase tariffs or restrict exportsof certain mineral resources, Chinese steel enterprises will face more challenges in acquiringoverseas mines. Therefore, how to avoid foreign policy barriers, and explore oversea market effectively, is theproblem facing Chinese steel enterprises.Oil and other five minerals have an externaldependence of over 50%Beijing Business Today reported that while the foreign dependence ofoil and iron ore continue to rise, exports of refined aluminum, refinedcopper, sylvite and other bulk minerals are increasing because of insufficient“domestic supply”, resulting in an increase of external dependenceof bulk minerals in the past 15 years. Minister of Land and Resources,Xu Shaoshi said, the above five minerals all have a foreign dependence ofmore than 50%. And with the global competition for mineral resourcesbecoming fiercer, the cost and risk of utilizing oversea mineral resourceswill increase gradually.Lin Boqiang, director of China Energy Economics Research Center,said, it is a fact that China has a high dependence and demand forforeign mineral resources, and increases in mineral prices in recent yearshave pushed up the costs for Chinese buyers. Excessive dependence onimports will certainly affect China’s economic security, so it is quite necessaryfor China to strengthen mining of mineral resources.Last October, the State Council approved the ProspectingBreakthrough Strategy Platform for Action (2011-2020), makingclear the strategic roadmap for prospecting in next 10 years.Comment Along with the rapid development of emergingeconomies, national economic gamesand global competition for mineral resources will increase,and the costs of utilizing oversea mineral resources risesharply, so the risk of excessive dependence on imports ishigher and higher. China should focus on developing localresources while exploring oversea markets.Coal conversion in an era ofhigh oil pricesAccording to China Petrochemical News, the 12 thFive-Year Plan for National Energy Science andTechnology (2011 to 2015) lists coal processing andconversion as national energy strategy for the first time,providing technical support and assurance for China tofurther reduce dependence on imported crude oil.Low oil prices era has gone. Due to geopolitical,debt crisis in Europe and America and other factors,crude oil prices in international market hiked continuouslyin recent years. Industry experts expect thatinternational oil prices will stay high. China has richcoal but poor oil reserves, and high international oilprices will boost coal conversion into clean fuel, in orderto replace petroleum. It has an important strategicsignificance.Comment This move not only reflectsthe focus on coal conversion,but also suggests that coal conversion andutilization will be a key direction for coal industryin next five years, and that China willcontinue to increase the input in coal conversionscience and technology. The planespecially emphasized energy saving andemission reduction in coal conversion process,which is the key to coal conversion.34