UPDATE: China's Ansteel Says Iron Ore Price Talks Continuing

Anshan Iron & Steel Group Corp. President Zhang Xiaogang said Thursday that there has been no result in the annual iron ore pricing talks between Chinese steel mills and global iron ore producers.

"We haven't had a conclusion yet" on expectations for the new contract iron ore price, which will apply in the 12 months starting April 1, Zhang told journalists in Perth.

But he said that it is a "very difficult time for everyone" in the steel sector and Zhang would appreciate the opportunity for iron ore miners and steel mills to "work together and cooperate."

Ansteel is China's second largest steel maker by output.

Zhang, in Perth to meet Western Australian Premier Colin Barnett and executives from its Australian joint venture partner, Gindalbie Metals Ltd. (GBG.AU), said that he plans to meet with Rio Tinto Ltd. (RTP) executives Friday and pricing will be discussed.

Some analysts expect contract iron ore prices to fall by roughly 40% this year because of weaker demand for the steel-making ingredient. The global economic downturn has cut demand for steel.

It has also pared profits, with Zhang emphasizing the financial stresses being experienced by Chinese steel makers.

"I believe that, starting from April this year, every single steel maker in China was making a loss."

Zhang said that Australian government approvals for Ansteel's A$162 million investment in Gindalbie are taking "a fair bit of time" but he said clearance for the deal from Australia's Foreign Investment Review Board will be "coming very soon."

Australian approval for the investment is one of the last hurdles for Ansteel and Gindalbie starting construction of their A$1.8 billion Karara iron ore venture in Western Australia.

Earlier this week Gindalbie said forecast production from the mine has been delayed by at least six months because of hold ups in government and environmental approvals.

Asked whether Ansteel is considering other investments in Australia's mining sector, Zhang said that the Chinese company is looking for "more minerals and opportunities in Australia."

However, at this moment Ansteel's priority is to make Karara happen first, "and then we'll go looking for other alternatives in terms of other investments," he said after a lunchtime presentation.

Gindalbie shares closed up 1.5 cents at 62.5 cents.

-By Stephen Bell, contributing to Dow Jones Newswires; 61-8-9244-4243; [e-mail]