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China urges boycott of Australia, Brazil iron ore

Issued at 2010-04-05



BEIJING : A Chinese industrial group has urged domestic steel companies to stop buying iron ore from the world's top three miners in protest of an alleged price monopoly, state media said Monday. The China Iron and Steel Association has asked domestic steel firms and traders not to import iron ore from Australia's Rio Tinto and BHP Billiton and Brazil's Vale for two months, the China Net, a government news website said.

China has 75 million tons of iron ore reserves and production of the resource by Chinese mines was up by 18 percent year-on-year during the first two months of 2010, the report said.

"At present our steel enterprises have ample supplies of iron ore to ensure normal steel production for two months," the report quoted association head Shan Shanghua as saying.

The association called for the boycott on April 2 as the most effective means to fight the "monopolistic behaviour" of the three iron ore giants, the report said.

According to press reports, Asian steelmakers like Japan's Nippon Steel and South Korea's Posco have already accepted massive hikes in iron ore prices this year of up to 90 percent.

Agreements by the Asian steelmakers in the iron ore talks have previously served as a benchmark in global negotiations.

China's Commerce Ministry told reporters last month the state would support domestic steel mills in their thorny iron ore price negotiations even after the Australian government bluntly told Beijing to stay out of the talks.

"As the world's largest iron ore consumer, the interests of Chinese steel mills should be reflected in the negotiations," commerce ministry spokesman Yao Jian told reporters.

For the first time in decades, China's steel industry and the mining companies failed in 2009 to hammer out a deal on prices.


Source: channel News Asia



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