UPDATE 2-Iron ore slump set to shrink China's mining capacity

viernes 27 de marzo de 2015 03:26 GYT

* About 75 pct of China iron ore mining capacity loss-making

* Utilisation rate at small mines as low as 20 pct last year

* Around 80 pct of Hebei's mining firms have stopped producing (Recasts, adds comments from other Chinese miners)

By David Stanway

SHIJIAZHUANG, China, March 27 (Reuters) - A slide in iron ore prices is turning the screw on China's fragmented mining sector, paving the way for closures and consolidation with three-quarters of the country's mining capacity operating at a loss, industry officials said on Friday.

More mine closures in China, the biggest consumer of the steelmaking commodity, would increase its appetite for imported iron ore and help ease a global glut that has slashed prices by more than half in the past 12 months.

"I would like to thank the big four miners for driving prices down because it has given bigger domestic mines an opportunity and forced small miners to cut production," Gao Yan, deputy general manager at the mining unit of Chinese steelmaker Angang Group, told an industry conference.

Top global producers Vale, Rio Tinto and BHP Billiton have boosted output despite falling prices, prompting No. 4 iron ore miner Fortescue Metals Group to propose limiting production.

The commodity fell to $54.20 a tonne .IO62-CNI=SI this week, the lowest since records began in 2008, and Citigroup predicted prices will drop below $50.   Continuación...