The State Council has decided to cut the production tax for iron ore miners by half.

The resource tax on iron ore will be reduced as of May 1st.

China's iron ore producers have been struggling with high production costs and sluggish demand from steel mills.

An industrial report published at the end of last year shows over 70-percent of Chinese iron ore mines are losing money.

Only around three-fifths of the iron ore mines in China are currently active.

At the same time, close to 80-percent of the iron ore used by Chinese steel mills last year was imported.

This is because of more competitive prices from abroad.