India looms large on the iron ore horizon: FMG
India could be the next big source of demand for Australian iron ore, according to Fortescue Metals chief executive Nev Power.
“Right now China is our major customer but, through Asia and into India, we are seeing very strong growth rates,” he said in an interview with The Australian on the weekend.
“India is now the fastest growing economy in the world, growing at around 7.6 per cent.
“It is still has a long way to go before it catches up to China, but with 1.4 billion people you can see that the demand for infrastructure and commodities is going to increase.
“We are seeing very strong growth rates in all of the Asian economies.
“That is where there will be tremendous growth — urbanisation and industrialisation — which will impact the demand for iron ore.”
Mr Power said Fortescue had sold some iron ore to India but the country was not yet a big importer of the resource.
“Its steel industry produces around 100 million tonnes a year compared with China’s 800 million tonnes,” he said.
But he added that the Indian economy was now growing at about 7.6 per cent compared with China’s 6.7 per cent.
“Its economy will be needing steel, as well as iron ore,” he said.
“The question for India is where are they going to get their iron ore from?
“They don’t have a lot themselves. If steel mills are developed along the coast, it could be a potential market for us.”
FMG sells most of its iron ore to China and smaller amounts to Japan, South Korea and India.
At the annual Boao Forum for Asia, on China’s Hainan Island, which Fortescue sponsors, the company announced it was joining with four universities from China and Western Australia in a project to promote innovation in the mining and resources sector.
The project involves Curtin University’s WA School of Mines and the University of Western Australia, as well as Central South University in Changsha, the capital of Hunan Province, and Lingnan College at the Sun Yat-sen University in Guangzhou.
Announcing the project on the weekend, Mr Power said the company was “excited by the prospect of engaging the brightest minds from Australia and China in this new program.”
The project will bring together expertise from China and Australia to look at areas of mining and minerals processing.
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