en.Wedoany.com Reported - Major Australian miners and their industry lobby group have asked the federal government to help counter tactics by China's state-owned iron ore buyer, China Mineral Resources Group (CMRG), to secure better terms, including exploring the idea of a single sales platform for Australia's most valuable export.
CMRG is increasingly taking a tough stance with mining giants to secure more favorable trading conditions for domestic steel mills, thereby tightening its grip on the $132 billion seaborne market. During protracted contract negotiations, CMRG blacklisted some of BHP's iron ore for seven months and told some mills not to discuss a new iron ore product with Fortescue. Australia is China's largest iron ore supplier, accounting for more than 50% of China's imports.
Canberra is closely watching the market as China is its largest trading partner and iron ore is the most lucrative export, forecast to generate A$114 billion (about $81 billion) in revenue this fiscal year, according to government estimates. A Senate panel on Friday asked Department of Foreign Affairs and Trade officials whether they had received requests from BHP, Fortescue, Rio Tinto, Hancock, or the Minerals Council of Australia for government intervention or support to deal with CMRG and iron ore pricing.
Steven Yates, an assistant secretary at the department, confirmed receiving such requests and said there had been "engagement with those miners and some suggestions were put forward in the course of those discussions about how this might be taken forward," but declined to provide further details due to commercial confidentiality. "We meet with Australian miners very frequently and try to support them as best we can to ensure they can continue to export iron ore and get the best possible price," he said.
The Senate panel also sought a response to "industry proposals about the need for some kind of export-side coordination in Australia to deal with a single country buyer." Deputy Secretary George Mina replied that previous plans for supply coordination in the agricultural sector had not been welcomed by trading partners, but the situation was different this time because "there is already an established single buyer," so long-term strategy clearly faces these issues.
BHP, Rio Tinto, Fortescue, and Hancock all declined to comment. An investor told Reuters that an executive at a top iron ore miner mentioned they had raised the issue with the government but said Canberra had been working to repair ties with China and might be reluctant to enter the fray now. BHP reached an agreement with CMRG in April, including agreeing to some sales denominated in yuan. China is currently negotiating with Fortescue and will begin annual contract talks with Rio Tinto later this year.
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