Fortescue wary of China's move on iron ore

·1-min read

Fortescue Metals Group is monitoring China's move to increase the pricing power of its steelmakers and potentially undercut global iron ore prices.

"We're staying close to our customers, monitoring the development of the China Mineral Resources Group," Fortescue chief executive Elizabeth Gaines told a mining industry forum in Kalgoorlie on Tuesday.

China has set up the centralised body to secure iron ore needed for economic development, and analysts fear the new "cartel" could undermine the price of Australia's top export.

China Mineral Resources Group was launched in Beijing last month, with exploration, mining, imports and exports, supply chain services, and investment within its scope, state media reported.

Ms Gaines said there is "no official feedback" on how the Chinese group might operate.

"Importantly for us, we've got 14 years of selling iron ore to our customers in China, including a range of channels," the head of Australia's third-biggest iron ore miner told the Diggers and Dealers Mining Forum.

"It's important that we continue to deliver to our customers and that could include that buying organisation," she said.

Fortescue shares were down 1.7 per cent to $17.90 at market close.

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