fortescue well advised with china link

ANDREW Forrest's Fortescue Metals Group has become the first major Australian company to establish a China Advisory Board -- with internationally famous trade negotiator Long Yongtu as its chairman.

The board of five, which would usually meet twice a year, with other less formal consultations in between, held its inaugural meeting in Beijing on Saturday, with chief executive officer Mr Forrest and executive directors Russell Scrimshaw and Graham Rowley also attending.

Tomorrow, Mr Scrimshaw will represent the company at the arrival of the first shipment of iron ore from FMG in Western Australia to northern China, at the new port of Caofeidian. The shipment will go to the Tangshan Iron & Steel Group.

Eleven days ago, the first FMG shipment for Baosteel arrived at Majishan port, off Shanghai.

The advisory board has one Australian -- Robin Chambers, a Melbourne-based lawyer who has specialised in advising Chinese companies on investing in Australia's resources sector, since working as general counsel for the former CRA, now Rio Tinto.

Mr Long is best known as the official who finally negotiated China's accession to the World Trade Organisation in December 2001, after the country had attempted to join for 15 years.

Mr Long, 64, studied at the London School of Economics back in the Cultural Revolution era (1973-74) and is a fluent and witty English speaker. He is the founder and secretary-general of the Boao Forum for Asia, an annual conference that regularly attracts regional leaders -- this year including Prime Minister Kevin Rudd.

Mr Scrimshaw said: "The idea is to give the main FMG board advice and guidance on ways to develop more strongly its relationship with China. And that also leads to strengthening ties between Australia more generally and China."

He said the advisory board would "look at opportunities to strengthen ties between ourselves and China's steel industry, and suppliers of equipment that would suit our particular style of operation".

It would also consider "technical skills that can be brought to bear to ensure our products are as acceptable as they can be in China, and trends in the Chinese steel industry, and more general socio-economic trends that can give us guidance".

The advisory board does not have a particular brief to explore options for encouraging Chinese equity participation in FMG, said Mr Scrimshaw.

He said such a board was a natural part of FMG's evolution as a company, because "its primary business focus is on China, whereas many of the other players in this industry have a broader sales base".

"We need to make sure we are optimising our ability to respond to opportunities here in China."