SMM Survey: Capacity Utilisation Rates Of Iron Ore Mines In Xinjiang In April and Forecast for May

SHANGHAI, May 16 (SMM) - In April, the capacity utilisation rates of mines in Xinjiang continued to fall, mainly due to safety inspections and bad weather. In the wake of water inrush accident at a local gold mine last year and the collapse of another mine in Inner Mongolia, Xinjiang has tightened safety inspections on non-coal mines. In particular, some small private mines are not allowed to re-open, unless they meet the standards. Small mines who have been shut down since last winter have delayed production resumptions. Large mines in Altay maintained normal production, but local small mines were unable to resume production. A large state-owned mine said that its monthly output of iron ore concentrates remained at about 130,000 mt. Due to the depletion of open-pit iron ore resources, a large private mine in Fuyun said its concentrate output will drop by half compared with last year. The number of mines and dressing plants in Hami area is relatively large. In April, the production of local large mines was relatively stable, while small mines were affected by safety inspections. Small private mines are subject to rectifications as their safety facilities fail to meet requirements. There is no supply of iron ore concentrates in Turpan this year. Mines in Hejing undertook rectifications for about 10 days in April.

Due to poor demand from local steel mills, private mines and mines who are not affiliated to steel mills will lack incentive to increase production in May. The capacity utilisation rates in Xinjiang are expected to pick up compared with April, but still below the same period last year.