Will Non-Coal Mine Accident Take a Toll on Iron Ore Mines in Sichuan?

SHANGHAI, Mar 8 (SMM) – The average capacity utilisation rate of mines in south-west China rose slightly in February, mainly contributed by production resumption at mines and production ramp-up by one state-run mine.

The capacity utilisation rate at iron ore mines in Sichuan increased slightly even as a roof accident occurred at one non-coal mine in Nanjiang county, Bazhong city on February 26, which resulted in 5 deaths and 3 injuries. Local mines in Nanjiang county stopped production after the accident. According to SMM survey, a combined seven iron ore mines in Bazhong city remain in production, which produced a total output of 590,000 mt in 2021. As the annual output of ROM (run-of-mine) at the mine incurred the accident was only 60,000 mt, the accident will have little impact on the overall iron ore concentrate output in Sichuan. Nonetheless, safety inspections will be tightened going forward.

The ROM output of a state-owned mine in Panzhihua has increased, and the output of some private beneficiation plants has also increased. The capacity utilisation rate at iron ore mines in Yunnan climbed. Despite power rationing, the impact on local iron ore mines was insignificant. Local private mines have not felt the impact from power rationing. The demand for local concentrates is strong, and various mines are also increasing production. The mines in Guizhou which are small in size, have not resumed production yet.

According to SMM survey, as the profits of steel mills gradually improve, the demand for iron ore in the south-west has picked up. This is expected to boost the production enthusiasm of mines. But at the same time, the stringent accident-induced safety inspections may affect the production of mines.

Taken altogether, the capacity utilisation rates in south-west China are likely to stabilise in March.