Right Pulse

China is claiming to have found a substantial low-grade iron deposits in the north of the country:

China News Agency reported a deposit with reserves of more than 3 billion tonnes of iron ore, the biggest in Asia, had been found in the country’s northeastern province of Liaoning….the deposit is better than the reserves of either BHP or Rio in the Pilbara region of Western Australia. Earlier this month, BHP and Rio announced a $US116 billion merger of their Pilbara operations — a deal attacked by Chinese steel mills as “monopolistic”.

ANZ senior commodity strategist Mark Pervan said the new discovery could become “a low-cost operation for Chinese supply”. He said reported iron contents grades of 25-62 per cent were high by Chinese standards, which typically produces mines with 20-40 per cent ore.

But, in global terms, “that’s not very high grade. Brazilian ore has a grade of between 65 per cent and 70 per cent,” Mr Pervan said.

BHP and Rio operations also boast grades above 60 per cent.

So will Rio or BHP get to bid to own or mine those deposits like Chinese government companies can do in Australia? Short answer is no.