Prime Minister Anthony Albanese has said that while he is “concerned” by reports of a negotiation stalemate between BHP and China over iron ore prices, such situations are often part of the deal-making process.
“These measures are always disappointing. Let’s hope, certainly, that they are very much short-term,” the Prime Minister told ABC News. “Sometimes when people are negotiating over price, sometimes these things will occur. I want to see this resolved quickly.
“I want to see Australian iron ore to be able to be exported to China without hindrance. That is important; it makes a major contribution to China’s economy but also to Australia’s.”
According to a Bloomberg report, China Mineral Resources Group (CMRG), China’s state-run buyer for iron ore, has put a hold on BHP shipments after negotiations stalled between the two parties.
Bloomberg Television reported sources close to the deal said that CMRG and BHP officials have met several times but have not yet come to a mutually agreeable deal.
“We understand from sources that the company [CMRG] has now told the producers in China to hold purchases of cargoes from BHP, especially dollar-denominated ones,” Bloomberg Television reporter Minmin Low said.
“So what this means is no deals can be signed even for shipments that [have] already left Australia. The only ones available now are those that already arrived in China and were denied and denominated in yuan. So it was a big blow to Australia, which has by far the largest source of iron for China.”
BHP has yet to comment on the reports.
Australia is the world’s largest producer of iron ore and the commodity accounts for more than 20 per cent of the country’s total exports and is projected to be worth $116 billion in 2024–25. Australia is a major supplier to China, exporting around $71.8 billion of Australian iron ore in 2023.
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