After 60 years of development, China’s metallurgical industry has become a global powerhouse in both steel and nonferrous metals. However, for decades, the underlying process philosophy has remained largely unchanged. The industry has consistently adhered to the “high-quality feedstock” principle, using premium-grade raw materials and ores for smelting and production. As a result, more than half of China’s primary iron ore requirements must be met through imports, while the vast reserves of low-grade, difficult-to-mine, complex, and coexisting ore resources domestically remain largely untapped and cannot be directly utilized.

① Low-grade, difficult-to-separate iron ore:

According to the Ministry of Natural Resources, since 2003, China has become the world’s largest importer of iron ore. Therefore, developing domestic low-grade, difficult-to-process ores to meet the demands of steel production has become an inevitable path for the development of China’s steel industry. Currently, China’s proven iron ore reserves amount to 68 billion tons, over 97% of which are low-grade, hard-to-mine and process, and complex co-associated ores that are difficult to directly utilize by existing blast furnace processes. Difficult-to-process hematite and high-phosphorus oolitic hematite are typical representatives of such ores; they have enormous reserves but have yet to be put into large-scale industrial utilization. Blast-furnace ironmaking is highly dependent on high-quality coking coal and high-quality iron ore. In 2015, the import rate of high-quality iron ore reached as high as 84%, and China still lacks any real say in international iron-ore pricing.

The “12th Five-Year Plan for the Development of the Iron and Steel Industry,” issued in 2011, also encourages the development of technologies for the exploitation of “low-grade, difficult-to-process, and co-associated mineral resources as well as the comprehensive utilization of tailings.” The “Guiding Opinions on the Comprehensive Utilization of Resources during the 12th Five-Year Plan,” also issued in 2011, explicitly states that “efforts should be intensified in research and development of technologies for the comprehensive utilization of low- and medium-grade iron ores, weakly magnetic iron ores, low-grade manganese ores, boron-magnesium iron ores, tin-bearing iron ores, and other hard-to-process resources.”

Composition of China's Iron Ore Resources

Data source: Compiled from publicly available information

Composition of China's Coal Resources

Data source: Compiled from publicly available information

② Laterite nickel ore:

Nickel is primarily sourced from sulfide nickel ores and laterite nickel ores, with laterite nickel ores accounting for 72.2% of the total supply. Previously, sulfide nickel ores contributed a large share of nickel production due to their high grade, low impurity levels, and ease of processing. However, as mining activities intensify, sulfide nickel ore resources are gradually being depleted, and laterite nickel ores will increasingly become the primary raw material for nickel smelting.

Since 2005, China has overtaken Japan to become the world’s largest consumer of nickel. China’s primary nickel production (in terms of nickel metal content) rose from 76,000 tons in 2005 to 7.1 million tons in 2014, and its share of global production increased from 6% to 36%. Among these, electrolytic nickel production grew from 76,000 tons in 2005 to 2.78 million tons in 2014, while ferronickel production (in terms of nickel metal content) was just 3,000 tons in 2005 but exceeded 4 million tons by 2014.

However, China is also one of the countries that are relatively lacking in laterite nickel ore resources. Currently, the country’s reserves of laterite nickel ore account for only 9.6% of its total nickel ore resources. These reserves are scarce and have relatively low grades, leading to high mining costs. Yet, China is a major producer of stainless steel products, and ferronickel—a key raw material for stainless steel—is primarily derived from laterite nickel ore. As a result, China must annually import large quantities of laterite nickel ore from countries such as Indonesia, Australia, and the Philippines to support its stainless steel industry. Since 2014, Indonesia has banned the export of raw nickel ore; consequently, domestic nickel producers have begun seeking alternative supply channels from the Philippines or establishing production facilities in Indonesia itself.

Traditional pyrometallurgical processes can only handle high-grade ores with nickel grades above 1.8%. For low-grade ores with nickel grades below 1.8%, current technologies struggle to achieve the economical and efficient enrichment and extraction of valuable metals, thereby severely limiting the development of nickel ore resources and the increase in nickel production. Meanwhile, the reserves of lateritic nickel ores with nickel grades ranging from 1.2% to 1.8% are at least twice as large as those of ores with grades above 1.8%.

World Nickel Reserves (10,000 tons)

Data source: Compiled from publicly available information

China's primary nickel production (in 10,000 tons) from 2005 to 2014

Data source: Compiled from publicly available information

③ Vanadium-Titanium Ore: Vanadium and titanium are critical strategic resources, and the smelting of vanadium-titanium iron ore and vanadium-titanium beach sand represents a global challenge. In August 2012, the National Development and Reform Commission released the “Twelfth Five-Year Plan for the Comprehensive Utilization of Vanadium-Titanium Resources and Industrial Development,” which stated: “Strengthening the comprehensive development and utilization of vanadium-titanium resources and promoting the sustainable development of the vanadium-titanium industry are of great significance to China’s industrial development and national defense construction.”

④ Chromite: China’s stainless steel production has grown rapidly—from 900,000 tons in 2001 to 19 million tons in 2013. More than 90% of chromium is used in the production of stainless steel, making it an essential element for stainless steel. The chromium content in stainless steel must be at least 10.5%. Currently, most chromium is sourced from chromite ore. The “12th Five-Year” Development Plan for the Iron and Steel Industry states: “Key special steel varieties to be prioritized for development include high-quality bearing steels, axle steels, wheels, and spring steels for major equipment such as high-speed railways; heat-resistant steels for ultra-supercritical thermal power units; and high-end stainless steels.”