In recent years, the active demand to steel, copper and other metals from China brings the demand for raw materials which promoted the prosperity of mineral industry.

However, recently, a series of the first-half-year economic datas of Chinese mainland were announced: the increasing rate of GDP is 7.0%, as the lowest in the recent 6 years; government receipts on year growth is 6.6%,growth rate- 4.1 per cent cut; fixed asset investment on year growth is 11.4%, as the lowest in the recent 14 years; real estate development investment on year growth is 4.6%, as the lowest in the recent 6 years; total amount of import and export on year growth decreases 6.9%, export increases 0.9%, import decreases 15.5%; Social consumptions on year growth is 10.4%, as the lowest in recent 15 years; The on year growth of CPI increases 1.3%, as still in the era of “1” in continuous 10 months; The PPI on year growth decreases 4.6%, as negative in the continuous 40months……All the above stated data indicate there is no doubt the economy of China has slown down.

With the slow down of the economy of the biggest buyer in the world -China, the currency supported by investment and export to China is tottering, unemployment rate increases sharply. Although the mining companies place their hope of increasing of demand of next circle into Indian, South America and Africa countries. Unfortunately, not any new market can reach the size of China, the prices of commodities won’t increase to the extent of iron ore, not any companies can enjoy such big amount of profit of BHP and Rio Tinto.

It is reported that, compared with last year, the price of iron ore drops sharply 50%, to USD 70/ton. The same as petroleum, the decreasing of iron ore reflects the continuous increases in supply and the decline in demand.

Australia is the biggest iron ore manufacturer in the world. Most iron ore exports to China, which takes up two-thirds of their iron ore supplied to overseas market. The analyzer think, because China is taking steps to cool down its real estate and industrial production activity, the demand in iron ore from China shall drop down as well.

Furthermore, this is a global issue. Many countries, such as Brazil, Indonesia and South Africa are faced with the risks. Both the exporting volume of coal and iron ore and the relevant investment are expected to drop down. The tax revenue and government income are facing the possibility of reduction. At the same time, the pressure of government expenditures is increasing as well.