Entering early May, commodities including iron, copper and bauxite have raised prices, especially iron ore, which reached $202 per ton on May 7. This situation is quite similar to the market in late December 2020.

During these two iron ore price increases, there were trade problems between China and Australia due to political disputes. While the price of iron ore in Australia has soared, China and Australia have continued to compete for iron ore in the heart of Africa since 2020; There are signs that Chinese companies seem to have a slight upper hand.

At present, China has built large terminals in Zhoushan and other places to store and transport iron ore, of which Zhoushan can store 15 million tons of iron ore at a time. (Xinhua News Agency)

Since December 2020, the governments of Congo (Brazzaville) and Cameroon have taken measures to drive Australia's Sundance Resources, which has signed contracts for nearly 10 years but has not moved, from the Mbaram-Nabeba iron ore project at the border between the two countries, and introduced mining companies with Chinese capital and Chinese enterprise consortiums.

The Mbaram-Nabeba iron ore mine is located on the border of Kazakh and Congolese, of which Mbaram is located in the southeast of Kazakh and Nabeba is located in the Congolese territory. According to the 2015 exploration report, the iron ore reserve is estimated to be 5.64 billion tonnes (33.4% grade), of which 805 million tonnes are high-grade iron ore (57.3%), a world-class large-scale high-quality open-pit iron ore.

Sundance signed contracts with Cameroon and Congo in 2012 and 2014, respectively, and both iron ore mines are planned to be sold to China. But the company was weak enough and failed to launch development for years. The governments of the Democratic Republic of the Congo and Kazakhstan grew increasingly dissatisfied, and by November 2020, Sundance had finally failed to reach a financing agreement with Australia-China Resources Group, and the two countries had finally become unkind to the Australian "small mining company".

In Congo, its President Nguesso announced the withdrawal of his mining rights from November 30, 2020. Cameroon announced in early December 2020 that it plans to cooperate with five enterprises, including China Metallurgy, China Railway Construction, Yantian Port, Baowu Group and Shanghai Tsingshan Group, to determine iron ore development partners in 2021. By May 2021, Cameroon's Minister of Mines, Industry and Technology Development, Ndoke, announced that he would work with a consortium of the five companies to develop an iron ore project in the country.

In fact, the projects that Australian companies have signed promises in Cameroon, Congo and other places but have not been implemented have basically been realized by Chinese capital and enterprises. China's presence in both countries also goes beyond the Australian corporate landscape.

At present, in order to get rid of the situation that Australia's iron ore imports account for a single country, China is trying to open up other iron ore markets and diversify import channels and sources.

China Steel Group, Shougang Group, Baowu Group and other large steel enterprises have also set up a number of Chinese-directly operated mines in Peru, Sierra Leone and Liberia to avoid being affected by external premiums. Baowu Group is also planning to start the construction of the Simandou iron ore mine in Guinea, Africa, which is currently known as the world's largest, and is expected to make initial progress in 2025.

As China ramps up its mining efforts with African iron ore companies, it is conceivable that the disturbances in Congo and Cameroon will turn further into a situation that is not favorable for Australia.