BEIJING, March 9 (Reuters) - China’s Hunan Valin Iron and Steel Group said on Wednesday it supported a proposed tie-up between top iron ore producers Vale of Brazil and Australia’s Fortescue Metals Group, in which it is a shareholder.
“I told them that as shareholders we were in support, and that as customers we would be willing to buy their products,” said company chairman Cao Huiquan, adding that Fortescue had contacted Valin ahead of the announcement.
The world’s no.1 and no.4 iron ore miners are in talks that could see Vale take a minority stake in Fortescue and the pair blend some of their iron ore to produce benchmark-standard material favoured in China.
Cao said Valin, which has a 14 percent stake in the Australian miner, had been suggesting to Fortescue that it should develop higher quality ore resources, which would also allow it to raise its market share in China.
“I personally feel that this is a good thing for China. (Vale) could become a relatively large shareholder in Fortescue but it isn’t certain that they will exceed our stake because they are certainly not going to issue more shares,” he said in an interview on the sidelines of China’s parliament.
“We cannot predict how the experts will view this matter. The Ministry of Commerce has a specialist team which will make an independent assessment,” he added.
Additional reporting by Kathy Chen; Editing by Richard Pullin