en.Wedoany.com Reported - The Russian Metallurgical Development Group plans to launch the "Far East-Ore" iron ore mining project in the Far East region, which is expected to increase annual iron ore production by 40% and expand export scale to China. The project has been included in Russia's national development plan, aiming to meet the growing market demand in China through the construction of seven new mining and processing plants and technological upgrades.
According to reports from the Russian metallurgical portal, iron ore production in the Russian Far East reached 170 million tons in 2023. The new project will invest in building seven mining and processing plants, introducing automated ore dressing equipment and digital management systems, achieving an increase in mining efficiency of over 30%. After the project is put into operation, it is expected to add an annual iron ore production capacity of 300,000 tons, with total capacity breaking through the existing scale by 40%. Production costs are projected to drop below $20 per ton, a decrease of about 15% from current levels.
The project employs efficient mining processes and intelligent sorting technology, which can increase the grade of iron concentrate to over 65%, a 5 percentage point improvement compared to existing products. According to disclosures from the Metallurgical Development Group, Chinese steel enterprises have reached preliminary purchase intentions with the Russian side. The first batch of orders will cover 50% of the initial capacity of the new project, with delivery planned to commence upon the project's operational launch in 2026.
The project has received joint support from the Russian federal government and local authorities. The total investment amount has not been disclosed, but it has secured a 15-year low-interest loan provided by a banking consortium led by the National Development Bank. Funds will be invested in three phases: geological exploration and equipment procurement will be completed in 2024, infrastructure construction will commence in 2025, and trial production will be achieved in 2026. In addition to capacity expansion, the project will also include the construction of dedicated railway lines and port storage facilities, forming an annual logistics throughput capacity of 5 million tons of iron ore.
China's dependence on imported iron ore has long remained above 80%, with imports from Russia reaching 12 million tons in 2023. Through technological upgrades and cost optimization, this project can enhance the price competitiveness of Russian ore in the Chinese market by 12%-18%. It is expected to increase Russia's share in China's iron ore import sources from 3.2% to around 5%. As Sino-Russian energy and mineral cooperation deepens, both sides are exploring the establishment of a Renminbi settlement mechanism for iron ore to mitigate exchange rate fluctuation risks.
The Metallurgical Development Group stated that the second phase of the project is planned to commence in 2028, aiming to add an annual production capacity of 400,000 tons and supporting the construction of a direct reduced iron production line, forming a complete industrial chain from ore mining to primary smelting. The Far East regional government is simultaneously promoting surrounding community renovation plans, which are expected to create 2,000 long-term jobs and drive regional GDP growth by 1.2 percentage points.
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