China's plan for iron ore giants hard to make the grade
* China plans 6-8 big iron ore miners to rely less on imports
* But high costs, low ore quality may hinder goal
* Vale, Rio, BHP on track to boost output even more
By Ruby Lian and David Stanway
SHANGHAI, April 16 (Reuters) - China's bid to slash its dependence on foreign iron ore miners by creating its own mega producers risks running aground before it starts due to high costs and poor quality of ore. Instead, overseas suppliers may end up shipping more to their top market.
For two decades, China has been trying to reduce its reliance on iron ore supplied by top producers Vale, Rio Tinto and BHP Billiton without much success because the price of the ore it produces is higher.
These global miners are boosting output to capture more of the Chinese market through massive expansion schemes to increase their dominance. BHP on Wednesday lifted its annual iron ore production guidance to 217 million tonnes, while Rio Tinto is close to mining 300 million tonnes a year and Brazil's Vale is targeting more than 360 million tonnes.
In an effort to make its own iron ore mining more efficient, China, which buys more than two thirds of the world's iron ore, is drafting a plan to create six to eight domestic iron ore miners by 2025, each with an annual capacity of more than 30 million tonnes, state news agency Xinhua has reported.
Beijing wants Anshan Iron & Steel Group, a steelmaker with its own iron ore mines, and the Metallurgical Mines' Association of China (MMAC) to lead the plan. A draft is expected by year end to be submitted to the State Council for approval. Continuación...