A bulk carrier operated by Fortescue Group loads iron ore bound for China at Port Hedland in Western Australia. Photo: Courtesy of FMG

A bulk carrier operated by Fortescue Group loads iron ore bound for China at Port Hedland in Western Australia. Photo: Courtesy of FMG

 
Australia’s third-largest iron ore exporter, Fortescue Group (FMG), recently announced it had completed a record syndicated term loan in yuan, saying the deal underscores the deepening China-Australia resources partnership and signals expectations for closer cooperation in the sector.

“The resources and energy sectors have long formed the backbone of economic ties between major trading partners like China and Australia. As global industries shift toward lower-carbon and more resilient models, these relationships are evolving from traditional supply arrangements into deeper forms of collaboration,” Apple Paget, Fortescue Group’s chief financial officer, told the Global Times on Sunday.

The financing, worth 14.2 billion yuan ($2 billion), drew strong participation from leading banks in China, Australia and other global markets, marking the first syndicated yuan-denominated loan by an Australian company, FMG said in a post on its WeChat account. 

Paget said that the iron ore trade exemplifies how China and Australia can build stability and mutual benefit through cooperation. “By working together through open dialogue, long-term contracts and shared investment in innovation, we can help ensure the continuity and resilience of critical supply chains,” Paget noted. 

Amid growing global uncertainty, the rising prominence of the yuan is coming into focus.

“China is the world’s second-largest economy, and we see opportunity for a progressive increase in trade in [yuan]. This deal reinforces the relevance of the [yuan] in global capital markets at a cost-effective rate. As demand for diversified, resilient funding models grows – especially those that support green industrial outcomes – the [yuan] is becoming more prominent,” Paget said. 

During a visit to China in July, Australian Prime Minister Anthony Albanese noted that about two-thirds of the iron ore consumed by China’s steel industry comes from Australia. He said Australia’s trade revenue from iron ore exports is projected to reach A$105 billion ($68.45 billion) this fiscal year, Reuters reported. 

Speaking ahead of a meeting between Australian miners and Chinese steelmakers, Albanese said that green steel could help expand the decades-long trade relationship, according to the report.

There are growing opportunities for cooperation across a range of fields, from green materials and clean energy to digital solutions that improve efficiency and reduce emissions, Paget noted. 

China-Australia cooperation is moving beyond traditional resource trade toward joint development in low-carbon technologies and green industrial chains, becoming a major driver for upgrading bilateral ties, according to an expert.

Chen Hong, professor and director of the Australian Studies Center at East China Normal University, said that Australia’s abundant resources play a pivotal role in bilateral trade, with iron ore at the core. Compared with some other suppliers, Australia has advantages in distance and supply stability, making it a long-term reliable partner for China. This cooperation not only secures China’s supply but also generates sustained returns for Australia, he said.

The resources sector has long been a cornerstone of China-Australia trade, but complementarities and opportunities for cooperation extend well beyond minerals. China has remained Australia’s largest trading partner, export market and import source for 16 consecutive years, the Xinhua News Agency reported.

In the 2022-23 fiscal year, trade with China boosted average Australian household disposable income by A$2,600 and supported 595,600 jobs, representing 4.2 percent of the nation’s total employment, Xinhua reported.

Chen noted that as the clean-energy sector grows, lithium has become critical for battery production and renewable energy applications. China’s strengths in technology, capital and infrastructure, combined with Australia’s resources, create a natural complementarity with vast cooperation potential.

Australia also enjoys abundant solar and wind resources, while China has mature technology in wind and photovoltaic power. Chen said that cooperation in renewables will help Australia adjust its energy mix and advance sustainable development.