It is reported that China's biggest state owned investment company Citic Pacific has signed initial agreements to sell as much as two thirds of the iron ore from its USD 4 billion project in Australia to Chinese steel mills.

Mr Barry Fitzgerald CEO of the Hong Kong based company's Australian unit in an interview said that ''We've identified the major steel works in China who have signed up preliminary sales agreements.” He said that the balance of the output will be used by the company's own mills in China.

According to a Bloomberg News survey, China is expected to use more iron ore in the next five years than Australia, the biggest exporter, has produced throughout its history, Rio Tinto Group said this month. The Asian nation's economic growth is projected to accelerate to 10.5% this quarter.

Mr Michael Heffernan a client adviser with Austock Securities said that ''China's appetite for iron ore will continue to be very strong. While the rest of the world has been floundering around looking for lifeboats, China just keeps on surfing. Its growth is improving again.''

(Sourced from Bloomberg News)