The mining majors of Australia are planning to boost their iron ore production in a bid to claim a majority of the Chinese market, with Rio Tinto leading with its targeted annual output of 300 million tonnes (Mt).

China is cited as the largest consumer of iron ore and imports nearly 500Mt a year, according to Reuters. This is necessary for its crude steel production that has a current rate of about 2Mt a day.

Meanwhile, Fortescue Metals Group has been raising its output by about 57% in an effort to pay its $2.5bn debt. To achieve this, the company requires iron ore prices of around $110 to $120 a tonne for a period of 12 to 18 months.

"Any release of China’s stockpiled iron ore is set to act as a short-term weight on prices." 

Fortescue chief executive Nev Power was quoted by Reuters as saying that the company has set a target of producing 41.6Mt this quarter, which represents an increase of 10.1Mt, compared with the previous quarter’s production.

Power further added that any release of China’s stockpiled iron ore is set to act as a short-term weight on prices.

The Australian miners are pushing their production rates to capture this potential market, vying with the world’s largest supplier of the commodity, Brazil-based Vale.

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The company intends to produce more than 360Mt annually, with additional plans raise this to more than 400Mt.

The Australian Bureau of Resources and Energy Economics forecast reveals that the average price of iron ore would be $110 a tonne this year and may fall to $103 a tonne next year.