Fortescue warns prolonged China price dispute could curb Pilbara iron ore output

Fortescue Metals Group alerted investors that an ongoing pricing standoff with China Mineral Resources Group could compel the company to scale back output at its massive Pilbara operations if the talks do not conclude before the end of the year. The dispute follows reports that the Chinese buyer has instructed steel mills to postpone or limit Fortescue shipments pending a new contract. Fortescue said it had shipped more iron ore than it had managed to sell for the three-month period ending 30 September, highlighting the imbalance.

The warning sent the company’s shares down more than 4% in Sydney trading. Iron ore remains Australia’s top export, worth over $100 billion a year and contributing about 5% of GDP, so any sustained reduction could hit national revenue. Fortescue’s chief executive Dino Otranto stressed the need to protect long-term industry and national interests, while the firm’s growth head Gus Pichot said it is defending fair market practices for shareholders.