Difficulty in achieving the 2025 iron ore production target

In 2024, China’s original iron ore reserves were 104.194 million tons, a year-on-year increase of 1.2%; The production of iron concentrate powder was 284.02 million tons, a year-on-year decrease of 1.5%. During the same period, the import volume of iron ore reached 1236.55 million tons, a year-on-year increase of 4.9%, accounting for about 72% of the total global iron ore imports. China’s dependence on foreign iron ore reached 81.3%. In order to enhance the ability to ensure resource security, relevant national departments and the China Iron and Steel Association proposed the “Cornerstone Plan” on January 10, 2022, with the goal of achieving a domestic iron powder production of 370 million tons, scrap steel consumption of 300 million tons, and overseas equity mineral production of 220 million tons by 2025. However, based on the actual situation from January to June 2025, the domestic production of iron concentrate powder is only 137.75 million tons, a year-on-year decrease of 7.97%. Considering the current production progress and capacity release arrangements of domestic iron ore enterprises, it is difficult to achieve the goals of the “cornerstone plan”.
Production status of newly added mining capacity in China by 2025
Within 2025, six iron ore development projects will contribute to the increase in production capacity. Among them, Taihe Iron Mine, Macheng Iron Mine, and Sishanling Iron Mine are large-scale mines with a raw ore processing capacity of over 10 million tons, and have strong potential for capacity release. Based on the construction progress and production capacity release rhythm of each project, it is estimated that these six projects will contribute a total of approximately 6.565 million tons of iron concentrate powder production by 2025. The following will further explain the situation of each project:
1. Taihe Iron Mine 10 million ton mining and beneficiation expansion project
The 10 million ton mining and selection expansion project of Taihe Iron Mine is a key component of China Baowu Iron and Steel Group’s iron ore resource guarantee system. It is under the jurisdiction of Chongqing Iron and Steel Group’s Xichang Mining Co., Ltd. and is managed by Baowu Resources Co., Ltd. The project started construction in 2016 and was listed as a key iron ore project in the national “cornerstone plan” in 2022, playing an important supporting role in implementing the goals of the “cornerstone plan”. The mine is located in the outskirts of Xichang City, Liangshan Yi Autonomous Prefecture, Sichuan Province. It has proven industrial reserves of 236 million tons and prospective reserves of 950 million tons, with an average geological iron grade of 30.54%. At the same time, it is associated with various valuable metals such as vanadium, titanium, nickel, cobalt, and copper, and has good mineral processing performance. It is one of the four vanadium titanium magnetite mining areas with the highest comprehensive utilization value in the Panxi region. This expansion is based on the original processing capacity of 3 million tons of raw ore and an annual output of 1.09 million tons of iron concentrate powder. After the expansion is completed, it will achieve a processing capacity of 10 million tons of raw ore, an annual output of 3.6 million tons of iron concentrate powder, 400000 tons of titanium concentrate, and 65000 tons of sulfur concentrate. As of February 2025, 71% of the total investment progress of the project has been completed, and the main sub projects are progressing smoothly. The stripping work of the mining site infrastructure has been completed. It is expected that the project will achieve partial production in the fourth quarter of 2025 and full production in 2026. Based on the current construction progress and production capacity release pace, it is estimated that the production of iron concentrate powder will increase by about 200000 tons by 2025.
2. Xichang Mine 5 million tons extremely poor comprehensive recycling and utilization project
The Panxi region has abundant reserves of vanadium titanium magnetite resources, but the proportion of off balance sheet ore (iron grade less than 15%) exceeds 60%. For a long time, due to its low grade and difficult beneficiation and smelting, it has been regarded as a “stagnant ore” that is difficult to develop and utilize. The annual processing of 5 million tons of extremely poor ore comprehensive recycling project implemented by Chongqing Iron and Steel Xichang Mining Co., Ltd. is one of the key supported projects of the national “cornerstone plan”, aiming to solve the technical bottleneck of efficient utilization of extremely poor vanadium titanium magnetite in the Panxi region. This project focuses on the extremely poor mineral resources with iron grades of 8% -20% and TiO ₂ content of 3% -8% in the Taihe mining area. Through technological innovation, it achieves efficient conversion of resources and is a typical demonstration project to implement the goal of “improving the utilization level of low-grade and associated mineral resources” in the Mineral Resources Planning (2021-2025). The project was initiated in June 2022 and officially started construction in July 2024. As of May 2025, the project has entered the critical stage of equipment installation and full process debugging, and is expected to be completed and put into operation in September 2025. The total investment of the project is 600 million yuan, and after completion, it can achieve an annual output of 500000 tons of iron concentrate and 160000 tons of titanium concentrate, with an annual output value of about 230 million yuan. It has positive significance for improving the self-sufficiency rate of iron ore in the Southwest region and promoting the implementation of the “cornerstone plan”. Based on the current project progress, it is expected that the production of iron concentrate powder will increase by about 125000 tons by 2025.
3. Zhongjiu Iron Mine 2 million ton mining and beneficiation construction project
Zhongjiu Iron Mine is developed and constructed by Zhongjiu Mining Branch of Gushan Mining Co., Ltd. of Anhui Magang Mining Resources Group. Magang Mining is affiliated with China Baowu Iron and Steel Group and is the first major mineral resource development project launched after the restructuring of Magang by China Baowu. The construction of this mine is of great significance in alleviating the long-term problem of high external dependence on iron ore faced by Ma Steel as an important steel enterprise in East China. Zhongjiu Iron Mine is located in Dangtu County, Ma’anshan City, Anhui Province, in the core area of the iron ore mineralization belt in the middle and lower reaches of the Yangtze River. It is an important component of the Gushan mining area. According to the Exploration Geological Report of Zhongjiu Iron Mine in Dangtu County, Anhui Province, the resource type of the mine is magnetite, with a proven reserve of 64.5368 million tons and an average iron grade of 35.07%. Since obtaining the exploration rights for the project in 2004, Magang has gone through more than ten years and completed 14 administrative approval procedures including project approval, safety assessment, and environmental impact assessment. Since Magang was included in the China Baowu system in 2019, Zhongjiu Iron Mine officially started construction in September 2020. As of February 2025, the main project has been completed by about 80% and is expected to be completed and put into operation in September 2025. After completion, the project will have an annual processing capacity of 2 million tons of raw ore and an annual production capacity of 770000 tons of iron concentrate powder. According to the project progress calculation, it is expected that the production of iron concentrate powder will increase by about 190000 tons in 2025.
4. Luannan Macheng Iron Mine
The Luannan Macheng Iron Mine is constructed, operated, and sold by Shougang Luannan Macheng Mining Co., Ltd. (referred to as “Macheng Mining”), a subsidiary of China Shougang Group. According to the coordinated development strategy of Beijing Tianjin Hebei, in 2014, the former Ministry of Land and Resources allocated the allocation of the mine resources to Shougang Group, and the original equity holder, Hegang Group, withdrew through an agreement transfer. Macheng Iron Mine is the first large-scale underground mine in China to adopt the “full process intelligent filling mining” technology, and it is also a model of resource cooperation and development led by central enterprises and participated by local governments. The mine is located in Luannan County, Tangshan City, Hebei Province, with a mining area of 10.08 square kilometers. It is a super large Anshan style sedimentary metamorphic iron deposit, containing 17 ore bodies with an average iron grade of 35% and a resource reserve of approximately 995 million tons. Since its launch in 2018, the project has made steady progress and achieved partial production in March 2025. It is expected to achieve full process production by the end of 2025. At that time, it will have the ability to produce 22 million tons of iron ore and 7.375 million tons of iron concentrate annually, which can meet about 15% of Shougang Group’s self-produced mining needs. Based on the current progress of the project and the pace of capacity release, it is expected that the production of iron concentrate powder will increase by about 4.3 million tons in 2025.
5. Cuihongshan Iron Polymetallic Mine Phase I Resumption Project
The Cuihongshan iron polymetallic mine was initially operated by Cuihongshan Mining Company, a joint venture between Xigang Group, Hebei Jianlong Mining, the Sixth Geological Survey Institute of the Province, and Yichun Forest Management Bureau. Later, after Harbin Shenglong Company acquired Jianlong’s equity, Jianlong withdrew. Due to unclear equity structure and chaotic management, on May 17, 2019, the mine experienced surface collapse during illegal mining of ore bodies above 190 meters. The Kurbin River flowed into the mine, causing 43 people to be trapped, 7 people to go missing, and direct economic losses of 19.18 million yuan. As a result, the project was completely shut down. In 2024, Jianlong increased its equity ratio to 85% through capital increase and share expansion of affiliated enterprises, clearing obstacles for resuming production. The first phase of the Cuihongshan iron polymetallic mine resumption project is located in Kelin Town, Xunke County, Heihe City, Heilongjiang Province. It is a large skarn type deposit that occurs in the Cuihongshan metallogenic belt. The total amount of resources in the mining area is 98.917 million tons, covering six metals including iron, molybdenum, tungsten, lead, zinc, and copper, among which iron ore reserves are 68.346 million tons. The project will resume production and construction in April 2024, meet the conditions for trial operation in October 2024, and achieve full resumption of production in May 2025. After resuming production, the first phase of the project will have an annual processing capacity of 1.6 million tons of raw ore, with an annual output of 850000 tons of iron concentrate powder and 12800 tons of zinc powder. Based on the current construction progress and the pace of capacity release, it is expected that about 500000 tons of iron concentrate powder can be added by 2025.
6. Sishanling Iron Mine Phase I Project
Benxi Sishanling Iron Mine is operated by Benxi Longxin Mining Co., Ltd. and belongs to Beijing Jianlong Group. The first phase of the project has been listed as a key project of the national “cornerstone plan” and is also the first iron ore development demonstration in China to achieve “double super” (ultra large scale, ultra deep well) production. The project completed the environmental impact assessment approval from the Ministry of Ecology and Environment in 2013, obtained the mining license in 2015, and was originally planned to start production in 2019. However, due to a major explosive explosion accident on June 5, 2018, which resulted in 12 deaths, the project was completely shut down for rectification. After the resumption of construction in 2022, the first 7.5 million ton production capacity project will enter trial production in January 2024 and be officially put into operation in the work report of Nanfen District Government in February 2025; At the same time, the production capacity project of 7.5 million tons will be launched simultaneously, and it is expected to achieve full production by 2027. The Sishanling Iron Mine is located in Sishanling Manchu Township, Nanfen District, Benxi City, Liaoning Province. The designed mining and beneficiation scale is 15 million tons per year, and it will be constructed in two phases of 7.5 million tons each. The depth of the first phase main shaft reaches 1505 meters, making it the deepest well in the Asian iron ore industry. The deposit is of Anshan style sedimentary metamorphic type, with a proven iron ore reserve of 2.484 billion tons and an average grade of 31.19%. The sulfur and phosphorus contents are 5.9 times and 5.29 times lower than the national first-class standards, respectively. The ore quality is excellent and suitable for producing high-end “ginseng iron”. At present, the project is in the stage of capacity ramp up, and it is expected to achieve 80% of the designed capacity (about 6 million tons/year) by the end of 2025, and achieve full production by 2026. Based on the pace of capacity release, it is expected to increase the production of iron concentrate powder by approximately 1.25 million tons by 2025.
Deep reasons for the failure of the “cornerstone plan” goals
By 2025, according to the “Cornerstone Plan” goal, the domestic production of iron concentrate powder needs to reach 370 million tons; However, the production of iron concentrate powder in 2024 was only 284.02 million tons, and the production from January to June 2025 was only 137.753 million tons, a year-on-year decrease of 7.97% and at a seasonal low. The main reasons for this gap include the following.
1. The downward shift in the center of gravity of iron ore prices has led to a decrease in the willingness to mine high cost domestic minerals
In terms of demand, from 2024 to 2025, China’s real estate market will be in a downward cycle, and demand will continue to be weak; On the supply side, mainstream mines have increased capital expenditures, resulting in a new high in iron ore production. Under the game of supply and demand, the price of iron ore has dropped from a high of $137/ton at the beginning of 2024 to a low of $80/ton, and will remain below $100/ton from January to May 2025.
The distribution of iron ore in China is uneven, with an average grade of about 34.5% (with Australian and Brazilian ores mostly above 50% -60%), and it is mainly mined underground, requiring mining and processing, as well as bearing environmental protection and tax costs. At the same time, transportation mainly relies on railways and highways, with unit costs significantly higher than sea transportation, and a comprehensive cost of about 80-90 US dollars per ton. With the downward shift of the price center of gravity, mining profits have been significantly compressed, and the willingness of mining enterprises to independently develop new mines has significantly decreased.
2. Environmental policies and resource integration push up the entry threshold
At the policy level, in April 2024, the Ministry of Natural Resources and seven other departments jointly issued a notice on further strengthening the construction of green mines, shifting the focus of green mine construction from “demonstration leading” to “comprehensive promotion”. It is required that by the end of 2028, 90% of large mines and 80% of medium-sized mines meet the standards for green mines and be included in government performance evaluations and audits of departing leaders. In January of the same year, 12 departments including the Department of Natural Resources of Hebei Province issued the “Comprehensive Management Plan for Non Coal Mines in Hebei Province (2023-2030)”, proposing to strictly control the number of mines, promote resource integration, and shut down small and medium-sized mines that did not meet the standards. The goal is to increase the proportion of large and medium-sized mines to over 36% by 2025 and reach 40% by 2030. The three provinces in Northeast China all implement the “Green Mining Construction Standards for Metallurgical Industry” and strengthen control through local legislation, such as Jilin Province’s “Three Batches” rectification action, Liaoning Province’s “Anshan City Mine Dust Pollution Prevention and Control Regulations”, Heilongjiang Province’s “Overall Plan for Mineral Resources (2021-2025)”, etc., all of which close or integrate mines that do not meet environmental protection requirements, and promote enterprises to invest more in ecological restoration. Although such policies have improved resource utilization efficiency, they have also led mining enterprises to increase capital expenditures on environmental protection, thereby to some extent suppressing new investment intentions. Taking the Miaogou Iron Mine of Hebei Iron and Steel Group as an example, with an annual processing capacity of 3 million tons, an additional investment of 27.53 million yuan is required for geological environment treatment and land reclamation.
3. The growth rate of domestic iron ore mining investment is relatively low
According to the data of the National Bureau of Statistics, from January to May 2025, the fixed assets investment in the national mining industry increased by 5.8%, the ferrous metal mining industry increased by 8.4%, and the fixed assets investment in the coal mining industry increased by 19.9%. It can be inferred from the industry guidance policy that the growth rate of fixed assets investment in the iron ore industry is relatively low, which further limits the pace of capacity expansion.
Difficulty in achieving the iron ore production target of the “Cornerstone Plan” in 2025
Affected by policies such as the downward shift in iron ore prices and the shift towards green mining, iron ore resources are gradually flowing towards qualified and capable mining development enterprises, and small and medium-sized enterprises are being merged or eliminated. Currently, the iron ore mining industry is in a painful period of transformation from quantity to quality. Based on the production of iron concentrate powder in 2024 and from January to June 2025, combined with the new production capacity of domestic mines in 2025, it is expected that there will still be a significant gap between the annual iron concentrate powder production in 2025 and the “cornerstone plan” target.