As the world's largest steel consumer and producer, China imports a large amount of high-priced iron ore from abroad, with Australia accounting for more than 60% of its imports. Mongolia, our neighbor, is also very rich in iron ore reserves, proven iron ore reserves up to 2 billion tons, mining development is relatively backward, there should be more mineral resources have not been proved. And Mongolia iron ore grade is not low, many in more than 50%. Why not buy iron ore from Australia instead of neighbouring Mongolia?
Mongolia industrial base is too weak, the national population of 3.3 million, GDP is only more than $100, because Mongolia's iron ore is deep, Mongolia itself can't independent mining, so they need to introduce foreign capital and technology, and the special location of Mongolia, is the gobi desert, the traffic is very inconvenient to buy to Mongolia's iron ore, and railway firstly to Mongolia, The cost is too high.
In addition, Mongolia's own ecological environment has been very fragile, even if Mongolia does not often develop iron ore resources, also often occur sandstorms and other bad weather phenomenon. If Mongolia begins to mine iron ore on a large scale, the environment will deteriorate further, possibly affecting China.
Importing Australian iron ore, while in the hands of others, is not without benefits for China. Iron ore is a non-renewable resource. For every country, iron ore is being mined less and less. Importing iron ore now means that it will not be controlled by others in the future.
What is worth mentioning in the picture is that China has diversified and upgraded its import of iron ore, not only relying on Australia, but also gradually increasing the import share of Brazil and other countries. In addition, its investment in Mongolia and African countries is also gradually expanding. The future prospect will be brighter.
