By Stephen Bell
PERTH, Australia--Rio Tinto PLC (RIO) said Friday that Chinese
steel mills are buying increasing amounts of higher-quality iron
ore as part of efforts to reduce their impact on the
environment.
"Part of the drive to improve environmentally is to upgrade the
quality of the ore that the Chinese mills, and in fact others
around the world, are using," Chief Executive Sam Walsh said. "That
means they are going for a higher spec product. They are also going
for more lump and pellet."
On an annualized basis, China's crude steel production is
currently running at about 780 million metric tons, up from just
over 702 million tons last year, Mr Walsh said.
"So we have seen growth, but we've also seen that there's a lot
of excess capacity," he told an industry luncheon in Perth.
The Chinese Government wants to take 80 million tons of that
capacity off line, mostly smaller and less efficient mills that
aren't performing environmentally, he said.
Rio Tinto doesn't supply iron ore to these mills.
Write to Stephen Bell at djnews@dowjones.com
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