On January 10, Inner Mongolia-based Chinese steelmaker Baotou Iron and Steel Co. (Baogang Group) announced that in 2012 the share of its own iron ore supplies in total iron ore consumption in its steel production increased to 59.01 percent, contributing to reduced production costs.
In recent years, Baogang's self-sufficiency in iron ore supplies used in its steel production has increased steadily, rising from 51.40 percent in 2010 to 58.15 percent in 2011 and 59.01 percent in 2012. This has helped to reduce costs due to the huge price gap between captive iron ore supplies and other iron ore supplies, especially imports. Furthermore, Baogang's annual costs are estimated to fall by RMB 100 million ($16 million) when its self-sufficiency in iron ore supplies increases by one percentage point.
