The Chinese government will cut the number of iron ore importers to 90 this year in a bid to tighten import rules and curb soaring international prices, the industry association has said.

Up to 20 percent of China's 118 iron ore importers -- 70 steel mills and 48 trading companies -- would go out of business, the China Iron and Steel Association (CSIA) said at the industry meeting held in the southwestern Kunming city.

The government began to cut the number of iron ore importers from 500 in 2005 to curb demand that had fueled price rises.

Industry consolidation was needed to curb the excessive number of importers, said CSIA vice chairman Luo Bingsheng.

The tighter rules require importers to double their minimum registered capital to 20 million yuan and a minimum annual production capacity of crude steel of one million tons.

Importers also have to comply with strict resource saving and environmental requirements, such as the 741.05-kilogram limit on the coal equivalent consumption to produce one kilogram of steel.

Water consumption of per ton of iron is limited to 8.03 tons.

The State Council has ordered closure of furnaces with a maximum volume of 200 cubic meters by the end of 2007.

All outmoded steel mills will be closed by the end of the year, and the deadline is likely to move forward if further price hikes occur.

China is the world's biggest producer and consumer of steel and iron ore imports rose 18.2 percent to a record 325 million tonnes last year.

China's largest steelmaker, the Baosteel Group Corp., settled on a 9.5-percent increase in the iron ore price for 2007 with major Brazilian producer Companhia Vale do Rio Doce (CVRD).

(Xinhua News Agency January 25, 2007)