China Mining Association urges steelmakers to buy into Australian mines

THE China Mining Association has called for Chinese steelmakers to take stakes in Australian iron ore mines, saying cheap Chinese production and high raw materials prices are unstainable.

Wang Jiahua, CMA executive vice president, told a Melbourne Mining Club lunch that Australia and China needed to co-operate more and that Chinese investment in Australia had fallen because of a confusing mining tax, poor infrastructure and labour and indigenous issues.

"The key to China's steel industry and Australian ore supplier cooperation is to find a balance between the interests," he said. "Can the two sides discuss and perhaps adopt a cross-shareholding approach to establish a long-term mutually beneficial China-Australian iron ore partnership?"

Following today's revelation in The Australian that China's premier had urged BHP Billiton chief executive Andrew Mackenzie to lower commodities prices, Mr Wang said there was a "lack of a fair mineral pricing mechanism”.

"It is hard to imagine whatever the Chinese sell will be cheap, whatever the Chinese buy will be expensive," he said.