Fortescue Metals, the third largest iron ore miner in Australia, is considering a listing of its JV with China's BaoSteel in either Hong Kong or Shanghai.

Mr Neville Power CEO of Fortescue Metals in a media briefing at the Boao Forum said that the group was studying the feasibility of an initial public offering of FMG Iron Bridge, an iron ore project it jointly develops with Baosteel in Western Australia.

Mr Power said that in selecting the listing destination, the group would take into account the capacity of fund raising in the market. He said that the funds raised would be used on the project's development, without disclosing further details.

In December, Fortescue said that the Iron Bridge project was estimated to have about 5.2 billion tonnes of resources. Currently, the group owns 88% of the project, while Baosteel owns the remaining 12%.

Fortescue, a smaller rival of Australian iron ore giants Rio Tinto and BHP Billiton, is heavily reliant on exports to China. Last year, 60% of the 100 million tonnes of iron ore it produced was sold to China and this year it expects to raise output to 155 million tonnes, about two-thirds of which will be exported to China.

He said that "Urbanization in China is a key driver for the demand going forward. China is expected to see growth of 7% to 8%, which will translate into a roughly 3% to 4% growth in demand for steel. Strong car sales and housing demand would also support the country's steel market in the long term.”

The price of iron ore has been falling since last year as the market cooled quickly due to an oversupply of steel around the world.

Goldman Sachs in a report said that it had lowered its forecast for iron ore prices by 3% to USD 139 per tonne for this year. The downward trend would continue in the next 2 years, dropping to USD 115 next year and USD 80 the year after.

Mr Power added that he expected the iron ore price to fluctuate between USD 120 and USD 130 per tonne for the foreseeable future, and added that now was a good time to introduce Fortescue's advanced experience in supply chain management to those Chinese steel manufacturers that were trying to upgrade equipment and raise production efficiency.