BEIJING (Commodity Online): Tussle between miners and big Chinese buyers of Western Australia’s iron ore reached a new intensity this year and 2010 looks set to get even tougher.

The dominance of major producers BHP Billiton and Rio Tinto will be under attack next year.

China has sought to increase its stake in the region via the deep pockets of its state-owned companies.

The Asian nation has already indicated it plans to merge its big steel mills in 2010, to increase their bargaining power when buying the ore.

A $116 billion joint venture of the Pilbara iron ore operations of BHP and Rio Tinto, signed by the companies this month, is the biggest salvo fired so far.

Early indications are that next year China will continue its campaign to pressure miners. Market principles should drive trade between the countries and disagreements over iron ore pricing would eventually be overcome.

Chinese mills relied on iron ore, and ultimately would have to put up with rising prices no matter how much they hated it.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook