Magang (Group) Holdings Co., which controls China's second-biggest Hong Kong-listed steelmaker, received government approval to spend 1.1 billion yuan ($142 million) on an iron ore and sulfur mine.
The Rohe mine will produce 3 million metric tons of minerals a year, including 983,100 tons of ore with 66 percent iron content, and 306,000 tons of minerals that contain 40 percent sulfur, the National Development and Reform Commission said in a statement on its Web site. Magang is based in Maanshan city of China's eastern province of Anhui.
Magang, the nation's seventh-biggest steelmaker by 2006 output, and other mills are speeding up iron ore exploration to cut reliance on imports as Chinese demand has driven global contract ore prices to records. Chinese ore typically contains 33 percent iron, about half the content found in Australia.
Magang's existing iron ore mines will be shut down in three to five years as reserves are depleted, the statement said.
Shares of Magang's Hong Kong-trade unit, Maanshan Iron & Steel Co. (323), rose 4.3 percent, the first gain in four days, to HK$5.05 by the midday break. The stock has surged 82 percent in the past year.
The statement from the commission, China's top economic planning body, did not say where the mine is located.
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