World No.2 iron ore miner Rio Tinto LtdPlc will make its first sale of iron ore from its mines in Australia to India, where it sees strong growth opportunities, a company spokesman said on Thursday.
The bulk of Australian iron ore traditionally goes to steel markets in Japan, South Korea, Taiwan and increasingly China, which represents the greatest growth market for Rio.
"This is only one shipment at this stage, but this is very significant in terms of forging a relationship with Essar, and potentially opening doors," Rio's iron ore division chief, Sam Walsh, said in a statement.
"We have long believed that India is a long-term market of great potential, and this development should be seen in that context," he said.
Rio will initially sell Essar Steel Ltd 160,000 tonnes of Pilbara Blend fines later this month but Essar could be in the market for up to 3 million tonnes of ore, according to the spokesman.
The sale also could precede domestic shipments of iron ore in India by Rio from the as-yet undeveloped Orissa project in eastern India, Walsh said.
Rio has described Orissa as one of the world's key iron ore discoveries.
Rio is in a development joint venture with state-owned Orissa Mining Corp, which holds rights to mining leases in Orissa.
Inroads made by Rio into India could also open the door for fellow Australian miner BHP Billiton if a proposed mega-merger of its iron ore division with Rio proceeds.
Both companies hope to seal the $116 billion deal by mid-2010, pending approvals from competition regulators in Europe and elsewhere.
Together, Rio and BHP would be capable of mining 350 million tonnes of iron ore a year, with blueprints already drawn up to increase output.
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