A bus drives past a sign displayed at the entrance to the Norton Gold Fields Ltd, which is northwest of Kalgoorlie, Australia. Norton, the Australian miner, is controlled by China's Zijin Mining Group Co. (Photo/China Daily)
"Baosteel has been looking to acquire iron ore resources for a long time to meet its demand," Le Yukun, an analyst with BOC International Ltd, Bank of China's investment banking division, in Shanghai, told the industry website mineweb.com.
"Now that prices have dropped, it's time for Baosteel to make acquisitions."
China's Shandong Iron and Steel Group Co Ltd, another industry giant, has also been searching for acquisitions. In April, it bought the remaining 75 percent stake in the Tonkolili Iron Ore mine from African Minerals Ltd in Sierra Leone, West Africa, after acquiring a 25 percent stake for about $1.5 billion in 2011.
"Chinese companies are making the right moves," Wei Zengmin, an analyst at the consultants Mysteel in Shanghai, said. "This is the time they should be acquiring assets even though commodity prices are falling. These are good investments in the long term."
Wei expects this trend to continue even though the acquisition process can take years. "Mining acquisitions involve a complicated process between countries, regulators and financial institutions," he said. "This can take several months or several years. But I expect Chinese companies to continue to look around for overseas acquisitions."
Apart from the iron ore sector, China's copper and gold miners are also expanding their foreign portfolios.
In May, China's Zijin Mining Group bought a 50 percent stake in a Porgera gold mine in Papua New Guinea for $298 million from Barrick Gold, which is based in Canada.
"Our partnership with Zijin is the first step in a long-term relationship with one of China's leading mining companies," John L. Thornton, chairman of Barrick, the largest gold mining company in the world, said in a statement.
"This partnership will provide opportunities to work together as we continue to create value for our respective owners."
At the same time, Zijin also paid $412 million to Ivanhoe Mines, a company based in Canada, for a 49.5 percent stake in Kamoa Holding Ltd, which runs a copper mine in the Democratic Republic of Congo in Central Africa.
The agreement is still awaiting approval from the DRC government.
"The weak mining market has helped Chinese companies buy overseas assets and increase their international footprint," Wei said. "There is great potential for the country's miners and steel producers to expand further."
Big three iron ore giants
Name: Vale SA
Founded: 1942
Entered China: 1973
Headquarters: Rio de Janeiro, Brazil
Number of employees worldwide: About 200,000
Global revenue in 2014: $38.24 billion
Name: Rio Tinto Plc
Founded: 1873
Entered China: 1973
Headquarters: London, UK
Number of employees worldwide: About 60,000
Global revenue in 2014: $47.66 billion
Name: BHP Billiton Limited
Founded: 1885
Entered China: 1973
Headquarters: Melbourne, Australia
Number of employees worldwide: About 47,000
Global revenue in 2014: $67.21 billion