When the bottom fell out of China-Australia relations last year, there was one conspicuous absence in the parade of punitive trade measures rolled out by Beijing: iron ore. Quite the contrary, bilateral trade in iron has boomed as other commodities withered. Iron exports accounted for well over half of Australia’s exports to China in 2020, and trade volumes have been supercharged by China’s post-COVID economic normalization in early 2021.

Overall, China imported 1.17 billion tons worth of iron ore in 2020, around 60% of which originated from Australian mines.

The trade is particularly lucrative for Australia of late due to sky-high prices. Iron ore is currently trading at 10-year highs, with prices up over 130% since July of last year. It’s a sellers’ market, so much so that one analyst has characterized the current climate as an unprecedented “transfer of wealth” from China to Australia. By some estimates, sustained prices of over $200 a ton will result in additional government revenues of $34-37 billion. Iron prices sit at approximately $213 at time of writing.