Australia’s iron ore sector at a crossroads – Business as usual or time to embrace green iron? in Commodity News 27/04/2026 Thanks to their cost efficiency, Australia’s major iron ore miners are likely to continue business as usual. Billions of dollars of infrastructure in the Pilbara region and economies of scale will shield iron ore miners from fierce cost competition so Australian miners may be the last to fall. Some analysts believe the massive Simandou project in Guinea will have little impact on Australian iron ore miners, which are among the lowest-cost producers globally, and any additional supply is likely to push higher-cost producers out of the market. While this is partly true, the potential pressure from these new entrants should not be overlooked. Australian iron ore miners emphasise that the global steel industry is growing, and that declining demand in China – by far Australia’s largest iron ore customer – is likely to be offset by increases in other key markets, including South-east Asia and India. India – the world’s fourth-largest iron ore producer (albeit generally of lower grade) – is largely self-sufficient, with the potential to export iron ore to China when prices are high enough. It remains unclear how much domestic new steel plants in India will rely on imports in the future. Major iron ore miners such as Vale are also seeking to expand their presence in these emerging markets. The extent to which declining demand in China will be offset by growth in other regions therefore remains an open question. Iron ore is expected to face a long-term decline in revenue due to lower prices, with the Australian government forecasting the nation’s iron ore export earnings could fall from AU$117 billion in FY2024-25 to AU$81 billion in FY2029-30. This declining trend was reflected in the federal budget FY2025-26 and in the Commonwealth Bank’s projections, albeit with a steeper outlook. Even if Australia’s iron ore mining sector is not at risk, it is approaching the end of its boom after decades of exceptionally high demand growth from China. The dynamics of the global iron ore trade are evolving, and Australia is vulnerable to these shifts, particularly those driven by China, the buyer of about 85% of its exports. China’s steel demand has been in decline throughout this decade. In 2025, China recorded its lowest steel production in seven years, and 2026 is expected to continue this downward trend. A series of recent challenges all point to intensified headwinds in this market for Australia. It is worth noting that all of this is occurring before additional iron ore from the recently commissioned Simandou mine enters the market at scale. This could further worsen the already challenging position for Australian iron ore miners, which are also struggling with degradation of iron ore quality. Meanwhile, China is moving towards using hydrogen in steelmaking, with several initiatives following the opening of Baosteel’s first 1 million tonne direct reduced iron (DRI) facility. China already produces the lowest-cost renewable hydrogen globally and is well positioned to scale green iron production using iron ore imported from Brazil and West Africa (particularly Simandou). Given China’s track record in rapidly expanding renewables and battery sectors, this transition could happen faster than expected. The war in the Middle East has prompted China, which is highly reliant on fossil fuels, to reassess its energy security strategy. Its l