Iron ore is Australia’s highest earning commodity export and taxes paid by the mining majors are crucial to federal revenue. Treasury estimates show a $10 move in the iron-ore price would impact tax receipts by A$500-billion in the 2025-26 financial year.
China Minerals Resources Group (CMRG), the state iron ore buyer, is seeking to extract better terms for Chinese steel mills in the $132-billion seaborne market, using increasingly tough tactics against iron ore mining majors to do so.
It has since September banned its mills from buying some brands of iron ore from BHP while negotiations for this year’s supply are underway.
“Iron ore is the bedrock of the economy, and the exports out of the Pilbara are very important to the Australian community, but also, of course, the federal budget,” King said.
Australia accounts for around half of the world’s seaborne iron ore exports, and hosts three of the world’s four biggest iron ore miners, including Rio Tinto, BHP, and Fortescue, with Brazil’s Vale as the other.