JOHANNESBURG (miningweekly.com) – Rio Tinto CEO Jean-Sébastien Jacques is confident China will continue to drive demand for mining products and iron-ore in particular, despite the introduction of new policies that will make environmental permits for steel mills harder to obtain and less capacity.
The country plans to eliminate 100-million to 150-million tonnes of steel capacity to reduce the number of polluting steel furnaces and become more consumption-focused.
Jacques believes the new policies will have a positive impact on China and the global mining industry in the medium to long term.
“The Chinese government is taking real action around pollution and the environment. We think this is the right thing to do and will have a positive impact on industry,” Jacques noted in a copy of a speech delivered at the Bank of America Merrill Lynch – 2017 Global Metals & Mining Conference in Barcelona, Spain.
He added that the restructuring of the steel industry in China did not necessarily mean a reduction in output, noting that it could, in fact, increase demand for higher-grade iron-ore, as older, more polluting blast furnaces are taken off line.
Further, he highlighted that, although China’s growth rate had slowed, its economy remained healthy.
“We expect government stimulus to be sustained ahead of their senior leadership conference later this year. Even the early action to control credit will be helpful in the medium- and long term.”