Saturday, January 17, 2009

Fortescue Joins China Iron Ore Talks

Reports from China suggest that Fortescue, the Australian iron ore miner, has for the first time joined iron ore negotiations in China with the 'big three' iron ore miners.

Mr Xu Xiangchun Mysteel information director of the China Iron and Steel Association noted that Fortecue's planned delivery to China of 50 million tons of iron ore in 2009 puts it in second place behind BHP Billiton and therefore its participation would loosen the duopoly in iron ore supply to China.

Fortescue now owns a prospecting area of 40,000 square meters in the Pilbara region of West Australia with an estimated total resource of 4.2 billion tonnes. It expects to produce 12 million tonnes of iron ore this year, and aims to lift output to 100 million tonnes in 2010, becoming the fourth largest iron ore supplier in the world.

Meanwhile Mr Shan Shanghua, the secretary-general of China Iron and Steel Association, stressed that China's steelmakers will insist on a price decrease and that the settlement should apply from January 1st 2009 for new term supply.

He said that China normally followed Japan to close the account on 31 March but it would be more beneficial as China's buyers viewed the new term price would doubtlessly belower than last year.

Source: Steel Guru

Update 19 January 2009: Fortescue rejects iron ore talks invitation

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