WA exports of iron ore product to China expected to exceed $1 billion

31/10/98

Premier Richard Court said today he expected the value of Western Australian exports of iron ore products to China to exceed $1 billion in the next two years, given the recent strong growth in the market.

Mr Court made the comment following meetings with steel producers in Shanghai last night, where it was confirmed that there would be continued strong demand for WA iron ore products to meet the growing demand for steel in the expanding Chinese economy.

"Iron ore exports to China in 1997 rose by 25 per cent to an annual worth of $870 million and making that country the second largest export market for WA iron ore," he said.

"Continued growth in this market is expected well into the next century. China is expected to produce up to 115 million tonnes of steel by 2000 and 150 million tonnes by 2010."

Mr Court said significant growth and export opportunities would also be realised with the continued development of the WA iron ore industry and moves towards value adding.

He said changing steel production technology in China and other parts of the world would bring with it new challenges and new value added export opportunities for WA.

"As China is the State's second largest iron ore customer, we must closely monitor developments in its rapidly growing steel production sector," the Premier said.

It is anticipated that China's demand for direct reduced iron (DRI) or hot briquetted iron (HBI) will dramatically increase over the next few years as that country experiences changes to steel production techniques.

Mr Court said the continued establishment of downstream processing industries in the State's iron ore sector ensured that the industry was well placed to meet the changing needs of its customers.

"Since 1996 there has been more than $3.5 billion committed to iron ore and associated projects. Much of this is focussed on value adding," he said.

"Current and future investment will see world-class processing facilities established in WA capable of supplying markets around the globe."

Mr Court said WA would continue to be a major supplier of iron ore throughout the world.

"For the last three years, WA has been the world's largest exporter of iron ore, with Brazil and India second and third respectively," he said.

"We currently supply nearly 60 per cent of China's iron ore exports and it is expected that WA will provide around 50 per cent of all iron ore imports to China well into the 21st century.

"Over the past 30 years, WA has established an excellent international reputation as a first-class supplier of iron ore to markets throughout the world and that will continue with a number of greenfield iron ore mines coming on-stream in the 21st century."

The new mines include BHP Iron Ore's Mining Area C, Hancock Resources' Hope Downs, Robe River's West Angelas project and Hamersley Iron's Nammuldi/Silvergrass development.

Mr Court said the new mines had a collective capital cost of up to $5 billion and reflected the positive outlook for the iron ore sector in WA.

Media contact: Bronwyn Hillman 9222 9475