Iron ore mine support in 2015

BEIJING - China will see less iron ore mine closures in 2015 thanks to government support to the industry, which has been suffering from low prices, global rating agency Fitch said Friday.

The domestic iron ore market faces high smelting costs and insufficient production. A slew of mines were forced to close as a result of the price drop of iron ore in 2014, which increased China's dependance on imported iron ores. Now only about 60 percent of iron ore firms are in production.

Support from the government will provide a lifeline to keep domestic supply in the market longer, Fitch said.

Resource tax on domestic iron ore producers will be reduced to 40 percent from 80 percent as of May, the State Council announced earlier this month.

Fitch expects more subsidies will be offered to support iron ore miners.

Data from the China Iron and Steel Association (CISA) shows that a record high of 933 million metric tonnes of iron ore was imported in 2014, up 13.8 percent from a year earlier. About 78.5 percent of iron ore was imported last year.