Australia's iron ore industry is well placed to benefit from some of the world's fast-growing economies and will not be reliant upon on Chinese demand in the future, according to Fortescue Metals CEO Nev Power.
While China is still crucial for the industry at the moment, Power thinks that in the future, seaborne iron ore supply coming from Australia will be important in helping fuel the industrialization and urbanization of developing countries.
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"In years to come, we will see growth continue in central Asia, India, the sub-continent, the Middle East and Northern Africa. There are around 3 billion people in the world's developing countries… and it's all very well suited to the seaborne trade with the Pilbara." Power told CNBC on a tour of its Pilbara operations.
Power says one of the key components to iron ore exports to China is the proximity of the Pilbara region to China's steel-making industry located by the coast. He noted that China has turned to importing iron ore, rather than mining its own reserves due to the logistical challenges which limit the competitiveness of its miners.
According to Power, developing countries – India in particular – face similar challenges when it comes to accessing and mining iron ore reserves. Power thinks that India could end up following China's model, where it uses the seaborne iron ore trade to fuel its industrialization process, and set up steel-mills close to the coast for easier access to imports.
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Until demand in these countries picks up, the Pilbara's iron ore miners remain well positioned to take advantage of China's long-term urbanization and industrialization goals.
"The sailing time from here to China is around 12 days… We can cycle a ship around in about a month. So that makes it very cheap and cost effective to ship the ore to Asia", Power told CNBC in Port Hedland this week.
China is currently the largest destination for Australia's iron ore exports. In November, shipments from Port Hedland, which is the world's largest iron ore exporting hub, to China surged 38 percent to 22.3 million tonnes.
—By CNBC's Yolande Chee.