Fortescue to boost yuan trade after landmark currency deal

By Enda Curran and Rhiannon Hoyle | Dow Jones Newswires

FORTESCUE Metals Group Ltd. (FMG.AU) plans to ramp up use of the yuan for both buying and selling products after a deal between Australia and China this week allowing the nations' currencies to be directly converted.

Andrew Forrest, chairman of the world's fourth-biggest iron-ore producer, said the company was already using the yuan in a "small percentage" of its trades. But he urged China to do more to remove obstacles to trading directly in yuan, also known as the renminbi or RMB. China is Australia's biggest trading partner and the world's largest buyer of commodities, including copper and iron ore.

"We don't have a specific goal," Mr. Forrest told reporters here on Friday. "But I'd like a considerable percentage of our turnover to start being reflected in RMB and really encourage that market."

He also said China's state-owned enterprises should remove restrictions around trading in RMB that presently make the currency difficult to value, forcing companies like his to undertake a higher level of risk management.

A Reserve Bank of Australia, or RBA, paper from last year looking at the growing internationalization of China's currency highlights, among the restrictions, limits on the amount of yuan transactions permissible between the two countries.

Fortescue, which conducted its first deal in the Chinese currency in mid-2011 – with forward foreign-exchange transactions to lock in the rate – has previously reported several small-scaleNIKE HYPERLIVE EP