How the biggest iron ore exporter is under threat

0
259

Austrialia – Former prime minister Tony Abbott has warned China‘s threat to economically bully Australia could succeed in the longer term.

Communist China is a major buyer of iron ore, the commodity used to make steel.

Australia’s biggest trading partner last year bought $65billion worth of iron ore.

The commodity, mined in Western Australia, is by far the biggest chunk of Australia’s $150billion worth of goods and services exported to China every year.

Mr Abbott, however, said Australia would be particularly vulnerable if China was able to instead source all of its iron ore from west Africa.

‘It’s when it no longer needs our commodities because it has established mines and farms in much more amenable places that we really will be vulnerable,’ he said in an opinion piece for The Australian.

‘Even more serious, though, for our long-term economic security, are China’s efforts to redirect its resource-buying away from countries like us.’

Mining giant Rio Tinto, a major exporter of iron ore to China, also jointly owns a 45 per cent stake in the Simandou iron ore project in Guinea.

Chinese aluminium company Chinalco has another 40 per cent share with the Guinea government owning the remaining 15 per cent stake.

A 2016 deal for Chinalco to buy all of Rio Tinto’s stake in Simandou lapsed in 2018 however, Mr Abbott said China would have ‘far less need for Australian iron ore’ should Rio Tinto divest its interest in the African iron ore deposit.

The former Liberal leader noted Western companies in Africa ‘are finding it hard to compete because they can’t manage local politics as readily as Chinese-led consortiums.

The Chinese government is keen to develop the world’s biggest untapped source of iron ore.

Source: Daily Mail Australia

LEAVE A REPLY

Please enter your comment!
Please enter your name here