China seeks in Africa to be less dependent on Australian iron

https://mundo.sputniknews.com/20210406/china-quiere-meterse-en-africa-para-no-ser-tan-dependiente-del-hierro-australiano–1110839559.html

China seeks in Africa to be less dependent on Australian iron

China seeks in Africa to be less dependent on Australian iron

Although the Asian giant has tried to pressure and punish Australia for wanting to investigate the origin of COVID-19, it has not been able to give up the mineral of

2021-04-06T11: 15 + 0000

2021-04-06T11: 15 + 0000

2021-04-06T11: 27 + 0000

economy

australia

iron

markets and finance

minerals

guinea

china

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Although the Asian giant has tried to pressure and punish Australia for wanting to investigate the origin of COVID-19, it has not been able to give up on Australian iron ore, accounting for more than 60% of Chinese imports, as Australia deepens its ties with The US, Japan and India – contrary to the policies that China applies in the Indo-Pacific region -, Beijing feels increasingly uncomfortable because it depends so much on the iron it imports from Canberra, strategic material for its military plans, says the columnist of the Nikkei Asia newspaper Ken Moriyasu. But this dependency situation could change by 2025, says Peter O’Connor, the lead metals and mining analyst at Australian investment firm Shaw and Partners. The Chinese are “very serious” about diversifying supply and flattening the cost curve for iron ore, he explains. China‘s key if it wants to diversify its imports is Guinea, an impoverished but rich West African country. minerals. The 110-kilometer Simandou mountain range is allegedly home to the world‘s largest iron ore reserves, and also of high quality, he reveals. Experts have known Guinea’s potential for many years, but the lack of infrastructure in the country has hampered the exploitation process. The alleged costs have always discouraged potential participants, such as the international mining business group Rio Tinto. But Beijing has more incentives to carry out this project than simple ROI calculations, as China needs to avoid the fate of Japan at the beginning of the 20th century, the specialist considers. How the market could react to guinean iron Currently, the Asian giant buys annually between 1 billion and 1.1 billion tons of iron ore to third parties, O’Connor says. “For every dollar that the Chinese can lower the price of a ton of iron ore in the long term, multiplied by 1,000 million tons, it would be 1,000 million dollars a year in annual savings,” the expert clarifies the magnitude of the company. It’s not just about diversity, it’s about the price drop, he adds. Long-term projections call for the price of iron ore to fall to around $ 60 per tonne, compared to $ 160 today, according to market projections. The project to develop Simandou has been divided into four blocks, with China participating directly or indirectly in all of them. The area has about 2.4 billion tons of ore with 65.5% iron. If China releases Simandou’s reserves and drives a drop in international iron ore prices, commodity markets would be driven by countries. in development, “says Johnston. For China this path would be easier than having to do business with Australia, a member of the Quad. China gains ground in Africa Guinea chairs the Group of 77 at the United Nations in 2021, a grouping of 134 countries developing countries that form a large bloc that China can depend on. Guinea has actively released statements on behalf of the group since it took office in January. Johnston believes China will be happy if there is progress at Simandou ahead of the Forum on China-Africa Cooperation which It will be held in Senegal. It will be the first time that the Beijing-led meeting has been organized by an African country. China is so keen on seizing African iron that it hastened to congratulate Guinean President Alpha Condé on his re-election in October, despite allegations of fraud. The election came after Condé altered the constitution for his own benefit, allowing him to run for a third term. On March 3, the first batch of COVID-19 vaccines donated by China arrived in Conakry, the capital of Guinea. Which made the country one of the first to receive vaccines from Beijing. “It’s not a coincidence,” O’Connor says. China is “paving the way” to control Simandou and dictate its agenda for 202, “he says.

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https://mundo.sputniknews.com/20210329/mineria-de-australia-busca-mercados-alternativos-ante-el-veto-de-carbon-de-china-1110533554.html

https://mundo.sputniknews.com/20210211/1100781782.html

australia

guinea

china

2021

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Sputnik Mundo

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australia, iron, markets and finance, minerals, guinea, china

China seeks to minimize iron dependence on Australia, a member of the Quadrilateral Security Dialogue formed by the US, Japan and India. And for this, it looks for alternatives on the African continent. Beijing is now interested in winning the sympathy of Guinea.

Although the Asian giant has tried to pressure and punish Australia for wanting to investigate the origin of the COVID-19, has not been able to give up Australian iron ore, as it represents more than 60% of Chinese imports.

As Australia deepens its ties with the US, Japan and India – contrary to China‘s policies in the Indo-Pacific region – Beijing is increasingly uncomfortable with relying so heavily on the iron it imports from Canberra, strategic material for their military plans, says Nikkei Asia newspaper columnist Ken Moriyasu.

But this situation of dependency could change by 2025, he says Peter O’Connor, the lead metals and mining analyst at Australian investment firm Shaw and Partners. The Chinese “take very seriously” diversifying supply and flattening the cost curve for iron ore, he explains.

Australian mining seeks alternative markets amid China‘s coal veto

China‘s key if it wants to diversify its imports is Guinea, an impoverished but mineral-rich West African country. The mountain range of Simandou, 110 kilometers long, supposedly houses the largest iron ore reserves in the world, and, in addition, of high quality, it reveals. Experts have known Guinea’s potential for many years, but the lack of infrastructure in the country has hampered the exploitation process.

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The alleged costs have always discouraged potential participants, such as the international mining business group Rio Tinto. But Beijing has more incentives to carry out this project than simple ROI calculations, as China needs to avoid the fate of Japan in the early 20th century, the specialist believes.

How the market could react to banana iron

Currently, the Asian giant buys annually between 1 billion and 1.1 billion tons of iron ore to third parties, O’Connor says. “For every dollar that the Chinese can lower the price of a ton of iron ore in the long term, multiplied by 1 billion tons, it would be 1 billion dollars a year in annual savings,” clarifies the expert the magnitude of the company. It’s not just about diversity, it’s about the price drop, he adds.

“The exploitation of Simandou’s iron ore reserves would transform the global market and make Guinea an iron ore exporting powerhouse alongside Australia and Brazil,” says Lauren Johnston, researcher at the SOAS China Institute at the University of London. .

Long-term projections foresee the price of iron ore to fall to around $ 60 per ton, up from $ 160 today, according to market projections. The project to develop Simandou has been divided into four blocks, with China participating directly or indirectly in all of them. The area has about 2.4 billion tons of ore with a 65.5% iron.

If China releases Simandou’s reserves and drives a drop in international iron ore prices, commodity markets would be driven by developing countries. “For China, this path would be easier than doing business with Australia, a member of the Quad.

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China gains ground in Africa

Guinea presides over the Group of 77 at the United Nations in 2021, a grouping of 134 developing countries that form a large bloc on which China can depend. Guinea has actively released statements on behalf of the group since taking over the presidency in January.

Johnston believes that China will be happy if there is progress at Simandou ahead of the Forum on China-Africa Cooperation to be held in Senegal. It will be the first time that the Beijing-led meeting has been organized by an African country.

Flag of Bolivia - Sputnik World, 1920, 11.02.2021

Chinese company Sinosteel to resume Bolivian steel project El Mutún in March
China is so interested in seizing African iron that it hastened to congratulate the Guinean president, Alpha Condé, for his re-election in October, despite allegations of fraud. The election came after Condé altered the constitution for his own benefit, allowing him to run for a third term.
On March 3, the first batch of vaccines of COVID-19 donated by China reached Conakry, the capital of Guinea. Which made the country one of the first to receive vaccines from Beijing.

“It’s not a coincidence,” O’Connor says. China is “paving the way” to control Simandou and dictate its agenda for 202, “he says.

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