Fortescue, which has a long-standing supply agreement with China's Baosteel, this week said it had held talks with Anglo American, the London-listed mining group, and China Investment Corp, the $200bn sovereign wealth fund.

The focus on Fortescue comes as China attempts to make large investments in Australia's resources sector. Chinalco is proposing to inject $19.5bn into Rio Tinto, the indebted Anglo- Australian mining group, while Oz Minerals this week agreed a A$2.6bn ($1.7bn) takeover offer from Minmetals, the Chinese producer.

Fortescue, which has a market value of more than A$8bn, has been linked to Chinese bid interest for years. However, the latest talks have prompted the Australian group to appoint financial advisers, led by JPMorgan, to consider “approaches and proposals”.