Highlights
- Baogang Steel launches 670,000-ton steel scrap recycling facility in Inner Mongolia
- Supports China’s ‘Dual Carbon’ environmental goals
- New project enables significant environmental benefits
- Saves 1.7 tons of ore per ton of recycled steel
- Reduces 1.6 tons of CO₂ emissions per ton of recycled steel
- Strategic initiative connects steel production with rare earth supply chains
- Demonstrates China’s integrated approach to industrial resource efficiency
On April 24, Baogang Jielian Renewable Resources Co., a subsidiary of China’s Baotou Steel Group (Baogang), officially broke ground on Phase I of its steel scrap recycling and processing project, marking a strategic expansion of China’s push toward a low-carbon, circular steel economy.
The first phase will include the construction of a 15,000-square-meter scrap processing workshop, along with five oxy-fuel flame-cutting stations integrated into an existing converter plant. Once operational, the facility will process up to 670,000 tons of steel scrap annually, with scalability to expand total capacity to 1 million tons per year, depending on market demand.
China Is Scaling Short-Loop Steelmaking
Scrap steel is the only large-scale substitute for iron ore and a core input for low-emissions electric arc furnace (EAF) steelmaking. Compared to the traditional blast furnace route using iron ore, each ton of steel produced with scrap saves 1.7 tons of ore, 350 kg of standard coal, and reduces CO₂ emissions by 1.6 tons, making this initiative both economically and environmentally critical.
The project is aligned with:
- China’s “Dual Carbon” goals (peak emissions and carbon neutrality),
- The 14th Five-Year Plan for Circular Economy Development in Inner Mongolia, and
- A national drive to de-risk reliance on foreign iron ore supply chains.
The project will establish a closed-loop scrap ecosystem, encompassing collection, processing, and reuse, and provide high-quality recycled input to Baogang and other regional mills, thereby stabilizing production and reducing raw material costs.
Rare Earth & Critical Mineral Realities
This development also aligns directly with China’s strategy for rare earth and critical minerals. Baogang is not only a major steel producer but also a key player in China’s rare earth sector, particularly in Inner Mongolia—the world’s most critical region for rare earth mining and processing. The integration of circular steel practices into Baogang’s broader industrial base reflects a coordinated national approach to resource efficiency across both ferrous and non-ferrous domains.
As rare earth magnet manufacturing increasingly co-locates with steel and alloy production, China’s ability to harmonize scrap recovery with rare earth supply chains gives it a multi-material advantage, lowering input costs, stabilizing feedstock flows, and reinforcing its dominance in downstream industries such as electric vehicles (EVs), wind power, and defense. For the U.S., this highlights the urgent need to develop not only rare earth mines but comprehensive circular systems that encompass both critical minerals and core industrial metals.
Scrap Steel Is Now Strategic?
Baogang’s 670,000-ton scrap recycling project appears to be more than a local industrial upgrade—but rather a cornerstone in China’s transition to a resilient, low-carbon industrial base. Is circularity now central to strategic metals, including steel?
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