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Member He Wenbo: Breaking through the dual constraints of resources and environment to improve the security of important national metal resources
2021-03-15 11:53:30

The Fifth Plenary Session of the 19th Central Committee of the Communist Party of China proposed that it is necessary to adhere to independent and controllable, safe and efficient supply chain strategic design and precise policy implementation by industry to promote the optimization and upgrading of the entire industrial chain; strengthen international industrial safety cooperation to form a stronger innovation force , A higher value-added, safer and more reliable industrial chain supply chain. In 2020, my country’s blast furnace pig iron output will be 888 million tons, accounting for 68.3% of global production; imported iron ore is 1.17 billion tons, accounting for 76.1% of global imports, and iron ore’s dependence on foreign sources exceeds 80%. At the same time, my country's demand for imported coking coal, scrap steel, limestone, etc. is also rising.(Car dismantling equipment


"From the above data, iron ore, coking coal, scrap steel, etc., as the most important raw fuels of the steel industry, are highly dependent on foreign sources." said He Wenbo, member of the National Committee of the Chinese People's Political Consultative Conference, Party Secretary and Executive Chairman of the China Iron and Steel Association.


At the same time, the Central Economic Work Conference made it clear that my country strives to achieve carbon peaks by 2030 and carbon neutrality by 2060. The iron and steel industry is one of the industries that emit large amounts of carbon dioxide. By 2025, my country's iron and steel industry must fully meet the ultra-low emission standards.


On the whole, He Wenbo believes that the steel industry needs to break through the dual constraints of resources and the environment, and coordinate the resource allocation structure and low-carbon process adaptability; it needs to coordinate the strategic design and system for the allocation of domestic and foreign resources such as iron ore, coking coal, scrap steel, and limestone. To improve the safety of important metal resources including steel. This is also the main content of He Wenbo's proposal "Across the Dual Constraints of Resources and Environment to Improve the Security of National Important Metal Resources".


He Wenbo told the reporter of China Metallurgical News that my country's steel industry is currently facing dual constraints in the fields of resources and environment, which are mainly reflected in the following aspects:


First, the international iron ore supply is in an oligopoly pattern, and there is a tendency to further increase. The four major iron miners in the world account for 50% of the world’s total output and 65% of the world’s export volume. They have obvious monopoly advantages. In the context of the global pig iron production reduction in 2020, the price of imported ore in my country has soared from US$90/ton in early 2020 to US$172/ton in early 2021, seriously eroding the profits of China's steel industry.


Second, the heavy tax and fee burden of domestic mining enterprises and the multiple approval procedures for iron ore construction projects restrict the increase in domestic iron ore production. The output of domestic iron ore ore fell from 1.381 billion tons in 2015 to 867 million tons in 2020. The main reasons are as follows: First, domestic iron ore enterprises are burdened with heavy taxes and fees. According to a survey of 22 iron ore companies conducted by the Iron and Steel Association, companies need to pay a total of 24 taxes and fees, mining rights proceeds, and land acquisition fees. All taxes and fees account for about 16% of the main business income, and the cost pressure is relatively high. Second, the mining and development of domestic iron ore is restricted by various aspects such as land, environmental protection, safety, etc., and there are many administrative licensing items and long periods, which are not conducive to improving the supply capacity of domestic ore.


Third, the domestic resources of high-quality coking coal are insufficient and the import is not smooth. With the need for large-scale blast furnaces in our country and pollution control at the source, the use of low-sulfur coking coal and high-quality main coking coal has become an inevitable choice, while the reserves of such coking coal in my country are relatively small.


Fourth, the tight supply of domestic scrap steel resources and high prices restrict the development of electric furnace steelmaking. In 2020, the amount of scrap steel used in my country's society is about 180 million tons. Because social scrap purchases mostly come from social residents, individual industrial and commercial households, non-commercial enterprises and institutions, and operating industrial and mining enterprises, and social residents, individual industrial and commercial households go to the tax bureau to issue general invoices or special invoices with annual sales not exceeding 1.2 million 5 million yuan, leading to restrictions on the purchase of scrap steel resources, which in turn led to tight scrap supply and high prices. Compared with 2015, the purchase cost of scrap steel increased by 177.6% in 2020.


In view of the above-mentioned current situation, He Wenbo suggested that we should start at the same time from the inner circulation and the outer circulation to solve specific problems:


First of all, we must consolidate the foundation of internal circulation. Specifically: First, to expand the supply of domestic iron ore as the most important means to make up for shortcomings in the near future, in terms of policies, grant domestic iron ore companies 5 to 10 years of income tax reduction; cancel unreasonable restrictions on domestic iron ore mining Provisions to speed up the streamlining of the approval process for mining new mines. The second is to speed up the resolution of scrap taxation issues, increase the scrap value-added tax rebate ratio from 30% to more than 70%; solve the problem of no VAT invoices for scrap recycling companies, unify the income tax verification method, and clarify that the company’s self-made vouchers are effective accounting documents , Or the tax authority will uniformly formulate the purchase certificate for the cost accounting of cash expenditures.


Second, we must coordinate the layout of the outer circulation. The first is to establish one to two overseas iron ore resource development enterprises, coordinate existing overseas resources, and concentrate efforts to accelerate resource development and production expansion. According to statistics, the amount of overseas iron ore equity resources that my country currently controls exceeds 24 billion tons, but the annual output of equity ore is only 160 million tons. The second is to use the overseas iron ore resource development platform to expand the development and trade channels of high-quality coking coal and auxiliary materials, as well as processing bases and import channels that meet my country's new standards for imported recycled steel raw materials. From 2011 to 2020, the world’s annual export of scrap steel reached 106 million tons at the highest and about 84 million tons at the lowest. The difference was 21.803 million tons. That is to say, the volume of international scrap export is flexible, but some scraps need to be processed abroad to meet my country’s requirements. Import standards. The third is to adjust the import policy of steel products, encourage the import of billets and ingots, and restrict the export of primary products to reduce domestic consumption of iron ore and reduce carbon emissions.


Source: China Metallurgical News


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