‘Want this resolved quickly’: Albanese ‘concerned’ after China bans iron import from Australian mining giant

Australia’s Prime Minister Anthony Albanese called on China to import Australian iron ore without hindrance after reports on Wednesday that a state-run Chinese iron ore buyer had told steelmakers and traders to temporarily stop buying shipments from global mining giant BHP.

China Mineral Resources Group Co.’s move against the world’s biggest miner, which is based in Melbourne, escalates an impasse in contract negotiations, news media reported.

Albanese said he was “concerned” by the reports of the disruption to Australia’s most lucrative export.

“I want to see Australian iron ore be able to be exported into China without hindrance. That is important. It makes a major contribution to China’s economy, but also to Australia’s,” Albanese told reporters.

“These measures are always disappointing. But let’s hope certainly that they are very much short term. Sometimes when people are negotiating over price, sometimes these things will occur. But I want to see this resolved quickly,” Albanese added.

China Mineral Resources Group Co. asked domestic buyers this week to suspend purchases of any dollar-denominated seaborne cargo from BHP, people familiar with the matter told Bloomberg, asking not to be identified because they were discussing private deliberations.

It means new deals can’t be signed, including for cargo that has already left Australia, where BHP’s mines are located.

The Chinese company, created by Beijing to bolster the country’s sway in the global iron ore trade, did not immediately respond on Wednesday to a request for comment from The Associated Press.

BHP told the AP the company did not comment on commercial negotiations.

Treasurer Jim Chalmers  said he would arrange a meeting with BHP chief executive Mike Henry to discuss the Chinese trade.

“I’ve seen those reports, they’re concerning reports. Ultimately, though, they are about the commercial arrangements between two companies and so in one respect, a matter for the company to work through,” Chalmers told reporters, referring to reports of the BHP boycott.  

“This is a government that advocates for Australia’s interests on the world stage, with our major trading partners. You can expect that to be the case again. (We will) work through these issues calmly and carefully, advocating for the workers and businesses and investors of our country,” Chalmers added.

China has lifted a series of official and unofficial trade barriers since Albanese’s government was first elected in 2022 that had been costing Australian exporters up to 20 billion Australian dollars ($13 billion) a year. But Australian iron ore was spared previous trade barriers due to its importance to Chinese steelmakers.

All Australia’s iron ore mines are in Western Australia state. Western Australia Premier Roger Cook said China was engaging in “strategic gamesmanship” with BHP to “get the best possible price.”

Cook said he had been told by BHP’s Asset President of Western Australia Iron Ore Tim Day that “negotiations are tough.”

“They are subject to a certain amount of strategic gamesmanship, for want of a better description. But I’m confident they’ll reach an agreement,” Cook told reporters.

Kaan Peker, a mining and metals analyst at Sydney-based financial services company RBC Capital Markets, said China could not stop buying BHP ore without taking “drastic measures of reducing … steel output.”

The world’s other major iron ore miners — Brazil’s Vale, Australia’s Fortescue and dual-listed Rio Tinto, which has headquarters in London and Melbourne — were “all producing as much as they can,” Peker said.

“It’s not like there’s excess capacity that’s waiting on the sidelines,” Peker said.

“It does seem like it’s more of a negotiation tactic. Possibly an effort to secure lower pricing,” he added.

(Except the headline, this story has not been edited by Firstpost staff.)