Fortescue grasps opportunities in Chinese market

Global iron ore prices could push higher, as analysts question mining giant VALE about when supply would normalize after January's deadly dam collapse in Brazil. While the world's fourth-largest iron ore miner Fortescue Metals Group sees strong demand continuing in China.

The collapse of Vale's Brumadinho iron ore tailings dam in Brazil was both shocking and devastating in its impact. FMG's CEO Elizabeth Gaines cited the terrible event had a significant impact on the market, adding that's why we are seeing iron ore prices remain at an elevated level.

FMG has been embracing autonomy now to solve an operation. The technology benefits in terms of safety and lift line efficiency. Gaines said FMG will be the first iron ore mine globally to be fully autonomous for haulage.

“We've been fully autonomous haulage systems for some, for a number of years and we're actually on the success path, we've seen about thirty percent productivity improvement,” said Gaines.

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Meanwhile, China and U.S. trade tension is becoming a big variable in the market. Gaines said the impact of these ongoing trade discussions may not have a major impact on steel production. "Certainly what we are saying is that the sheer steel production is predominantly consumed domestically. China has not been a big exporter of steel to the U.S., maybe one percent of steel production,” she added.

FMG as one of the two major ASX listed companies, with more than half of female board, also focuses on diversifying markets. Gaines pointed out that China has been the dominant market in terms of the imports of seaborne iron ore, adding that FMG is in a very strong position and looking at other opportunities.

“We've seen steel mills being built in Vietnam and Indonesia and we actually supplied some of those steel mills as well. Over the long term, we see growth coming in the broader region when it comes to the diversification of commodities,” Gaines said.

Gaines also told CGTN they are investing heavily in exploration. “We like many mining companies are really focused on that inevitable growth in electric vehicles which will drive demand for battery materials…And we for exploration targets in Ecuador and in Argentina and those are predominantly focused on copper-gold,” she said, adding that FGM is looking opportunities for diversification both in Australia and overseas.

(CGTN's Cheng Lei also contributed to this story.)