It is a widely held belief that closer ties between BHP Billiton (BHP) and Rio Tinto ((RIO)) in the Pilbara will force Chinese buyers of iron ore to switch their focus to other sources. China doesn't like dealing with an increasingly entrenched oligopoly. This belief is increasingly being confirmed by smaller developers and producers in Australia reporting a spike in interest from Chinese customers.
Industry minnow Apollo Minerals ((AON)) is one such alternative focus with Apollo's executive director Richard Sealy reporting from a road show across China that most major organisations in the country have welcomed him with open arms in the past two weeks.
According to Sealy, the Chinese are anticipating strong future demand due to the government's stimulus through large infrastructure projects. Thus Chinese producers are now focusing on junior iron ore developers and in particular the magnetite iron ore projects in Western Australia. In a company statement released this morning, Sealy states many of the producers he has met on the road show have openly admitted this.
Apollo Minerals is actively seeking a major Chinese operator as a partner for its Mt Oscar Magnetite Project. Sealy will be in China next week to continue discussions with a potential partner.
AON Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
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