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Smog-hit China's switch to high-grade raw materials to boost big miners

Published on Jan 27, 2014 6:13 AM
 
Severe smog hits Beijing and surrounding regions. Chinese steelmakers and power plants are being forced to shop around for higher-quality raw materials to meet tougher air pollution standards, a move that will be a boon for global mining giants that produce premium-grade iron ore and coal. -- ST PHOTO: KOR KIAN BENG

SHANGHAI (REUTERS) - Chinese steelmakers and power plants are being forced to shop around for higher-quality raw materials to meet tougher air pollution standards, a move that will be a boon for global mining giants that produce premium-grade iron ore and coal.

Beijing, under heavy public pressure to cut pollution after a series of hazardous smog crises in many major cities last year, has vowed to raise emission standards and shut polluters in big industrial sectors like steel, cement and power.

The air pollution campaign could squeeze out iron ore suppliers from Iran, Mexico and Vietnam, but would be good news for others from Brazil and Australia, like Vale, BHP Billiton and Rio Tinto as well as Australian coal exporters that supply top grade raw materials.

It could also undermine China's efforts to diversify its sources of iron ore away from Australia and Brazil, which account for more than 70 per cent of imports and - according to Beijing - have an undue influence on the way prices are set.

 
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