March 5 (Bloomberg) -- Wuhan Iron & Steel Group Corp. will continue to acquire iron ore resources overseas in an effort to become self sufficient, President Deng Qilin said.
The Chinese steelmaker, which currently imports more than 85 percent of its iron ore, aims to be able to supply all of its own needs in three to five years so that it doesn’t need to buy from foreign “monopolies,” Deng said in an online chat today on the website of the National People’s Congress.
Vale SA, Rio Tinto Group and BHP Billiton Ltd., the world’s biggest iron ore suppliers, abandoned an annual pricing system for Chinese steelmakers last year in favor of quarterly agreements as spot prices for the material rose. Wuhan Steel accelerated its buying of assets during the financial crisis to help reduce its reliance on overseas suppliers and now owns or has stakes in eight iron ore mines abroad, Deng said.
Overseas iron ore companies are a “monopoly,” he said. “They can raise prices as much as they want. There is no room for negotiation.” Deng is also the chairman of the China Iron & Steel Association.
Foreign suppliers are now planning to establish a base at a Chinese port from which they can sell ore at spot prices, Deng said. This plan will hurt China’s steelmakers to an extent that is “too much to afford,” he said.
Wuhan Steel agreed last month to jointly develop mining projects in Canada with Century Iron Mines Corp., after entering into an agreement in January with Adriana Resources Inc. to cooperate on developing, constructing and operating the Lac Otelnuk iron ore project in Canada.
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