Sinosteel Corp, China`s second-biggest iron-ore trader, said it would resume buying low-grade iron ore from India after the government cut tax on exports of the commodity because of protests from local mining companies and Chinese steelmakers.
Exports of iron ore fines with less than 62% Fe will be taxed 50 Rs/t (US$1.2/t), finance minister Palaniappan Chidambaram sid on Thursday.
He retained the 300 Rs/t (US$7/t) tax on all other grades of the commodity.
"Of course we will start buying again as more than half of our purchases are low-grade ore," said Hong Sen Wang, managing director of Sinosteel`s Indian unit, by telephone from New Delhi.
The company imports as much as 10 Mt/y from India.
Sinosteel was among at least 10 Chinese steelmakers to halt imports from the South Asian nation after the goverment on February 28 announced a flat US$7/t tax on exports of all grades of ore to ensure supplies are enough to meet local demand.
Indian`s iron ore sales fell by a third to 7 Mt in March and China`s steel mills said they would buy more Australian and Brazilian ore.
India was the third-biggest supplier to China last year, providing about a quarter of 326 Mt of imports by the world`s biggest steel-producing nation.
Indian shipped 89 Mt in the year ended March 31, 2006, of which 27 Mt were fines with a ferrous content of less than 62%. China relies on imports for more than half its iron-ore needs.
Five straight years of increases, fueled by Chinese demand, have tripled global iron-ore prices.Source : www.mining-journal.com
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