en.Wedoany.com Reported - Major Australian mining companies say the standoff between BHP and China Mineral Resources Group (CMRG) is an example of a new long-term reality where Beijing is increasingly demanding a larger share of profits from the iron ore industry.

Negotiations between BHP and CMRG, which represents about 80% of China's steel mills, lasted for months. The Chinese side sought price reductions and expanded use of the renminbi. BHP representative Tim Day indicated that such negotiations will only become more complex as China's influence as the largest buyer grows.

Dino Otranto, head of Fortescue's mining division, stated that China has long been trying to redistribute profits within the iron ore supply chain to steel enterprises. He described a meeting in 2022 where Chinese officials presented a profit margin comparison: mining companies had margins of 70%-80%, while steel enterprises were in negative territory.

Fortescue has responded to the pressure by adjusting its strategy: sourcing from Chinese manufacturers and securing a $3 billion renminbi-denominated loan from Chinese banks. The company believes negotiations with CMRG will remain tough and protracted.

Experts expect other mining companies to follow Fortescue's lead, using renminbi loans more frequently as a source of liquidity.

Rio Tinto noted that conflicts have become more public, but the fundamental contradiction between buyers (who want low prices) and producers (who want high prices) has always existed. The company continues to focus on relationships with Chinese customers and international projects.

It is also noteworthy that China is exerting pressure on the rare earth market, driving down prices. This makes launching new projects in Australia more difficult. In response, government regulatory measures are under discussion, including the possible setting of a minimum price.

This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com