China’s negotiating position with Australian iron ore companies will be significantly strengthened with the creation of the state-backed China Mineral Resources Group.
The company’s line of business includes “mining, iron ore processing, import and export of goods, sale of metal ores, and inventory and supply management services.” It was registered in Xiong’an New District, Hebei Province, with a capital of 20 billion yen – about USD 4.3bn.
The new company could potentially give Chinese buyers a stronger hand to demand lower prices.
So far, Rio Tinto and BHP have not commented on the new Chinese giant.
State media Global Times reported that the new firm would give China a greater say in pricing.
Large Chinese companies China Baowu Steel Group, Ansteel, China Minmetals and Shougang Group will be included in the competence of China Mineral Resources Group.
The company will also coordinate China’s massive investment in iron ore projects. Chinese companies have already begun developing a huge mine in Guinea, West Africa.