AU exported ~1.5-2 trillion (lazy chatgpt math) worth of iron ore to PRC in last 20 years... which is life changing sovereign fund size, for Norway (also ~2T), with 5 million people. Or UAE 1 million emraties. Qatar with 300k Qataries. Much less so for 25m OZs. Doesn't mean they haven't squandered what they have, but just to put scale in perspective.
Not to mention PRC steel employs like 3m people, about the entire population of western australia where all the iron ore is. Unless AU dumped 1/5 of their entire workforce, relocate millions of workers and families, they can't make enough finished steel products to fill PRC appetite. I think much easier and profitable for AU to double down on ore extraction and ship more $$$ than finished steel. That's where AU competitive advantage is. Otherwise buyers will look elsewhere, i.e. Brazil could have been expanding iron ore exports much sooner.
Like I mentioned in another comment, you create manufacturing companies in your home turf to refine those raw materials into higher value products, which is exactly what Norway, the UAE and Saudi Arabia have done (Qatar cant exactly do that because their resource is basically just gas). Companies like Aramco, SABIC, ADNOC and Statoil exist. I don't see any of those countries inviting Adani or Yuxiao to extract their material for them. Yet China is a major customer for all of them, as they all are for China (Norway maybe less so).
Not to mention PRC steel employs like 3m people, about the entire population of western australia where all the iron ore is. Unless AU dumped 1/5 of their entire workforce, relocate millions of workers and families, they can't make enough finished steel products to fill PRC appetite. I think much easier and profitable for AU to double down on ore extraction and ship more $$$ than finished steel. That's where AU competitive advantage is. Otherwise buyers will look elsewhere, i.e. Brazil could have been expanding iron ore exports much sooner.