CBMX coup as Rio Tinto signs up
By Richard Fu |
March 31, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S new spot iron ore trading platform claimed a major victory yesterday by securing mining giant Rio Tinto as its member.
The signing up of Australia's largest iron ore producer marks a key step in the China Beijing International Mining Exchange's (CBMX) efforts to broaden market participation. The electronic trading platform, which will officially start operation in May, is backed by major Chinese steel makers and traders and designed to strengthen China's pricing power on iron ore, the steel making ingredient of which China is the world's largest buyer.
"We welcome the development of CBMX as it gives us a new option for selling any available tons to China, over and above those already contracted. We look forward to the exchange developing into a transparent, independent, efficient and sustainable iron ore trading platform supported by broad market participation," said Alan Smith, president of Rio Tinto Iron Ore Asia.
The move came a day after Brazilian miner Vale signed a memorandum of understanding with CBMX to support the development of the platform, though Vale is yet to officially join the network.
The CBMX is widely seen as a rival to the Singapore-based globalORE trading exchange, which is backed by Australia's second-largest iron ore producer BHP Billiton.
"Our position is that we are positively studying participation and are in principle supportive of any platforms that support market transparency and liquidity," a BHP spokeswoman said.
Vale, Rio and BHP control the majority of the world's seaborne iron ore trade. These companies two years ago broke with a four-decade-old custom of annual iron ore pricing following Chinese opposition.
Fortescue Metals Group Ltd, Australia's third-largest iron ore exporter, signed up to join CBMX last week, becoming its first foreign miner member.
The signing up of Australia's largest iron ore producer marks a key step in the China Beijing International Mining Exchange's (CBMX) efforts to broaden market participation. The electronic trading platform, which will officially start operation in May, is backed by major Chinese steel makers and traders and designed to strengthen China's pricing power on iron ore, the steel making ingredient of which China is the world's largest buyer.
"We welcome the development of CBMX as it gives us a new option for selling any available tons to China, over and above those already contracted. We look forward to the exchange developing into a transparent, independent, efficient and sustainable iron ore trading platform supported by broad market participation," said Alan Smith, president of Rio Tinto Iron Ore Asia.
The move came a day after Brazilian miner Vale signed a memorandum of understanding with CBMX to support the development of the platform, though Vale is yet to officially join the network.
The CBMX is widely seen as a rival to the Singapore-based globalORE trading exchange, which is backed by Australia's second-largest iron ore producer BHP Billiton.
"Our position is that we are positively studying participation and are in principle supportive of any platforms that support market transparency and liquidity," a BHP spokeswoman said.
Vale, Rio and BHP control the majority of the world's seaborne iron ore trade. These companies two years ago broke with a four-decade-old custom of annual iron ore pricing following Chinese opposition.
Fortescue Metals Group Ltd, Australia's third-largest iron ore exporter, signed up to join CBMX last week, becoming its first foreign miner member.
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