Oct. 19 (Bloomberg) -- Fortescue Metals Group Ltd., Australia’s third-biggest iron ore producer, said it may seek to blend its ore with that of Brazil’s Vale SA to better suit Chinese steel mills.

Vale, the world’ biggest iron ore exporter, has a diminishing supply of so-called lump ore and may benefit from mixing it with Fortescue’s ore to sell in China, Executive Director Graeme Rowley told reporters today in Port Hedland. Perth-based Foretescue hasn’t held any talks with Vale on a venture, he said.

“One of Brazil’s big problems is they are running out of lump,” Rowley said. “There are various opportunities. Maybe there are some options, as we go down the track, of blending our ore with theirs.”

Iron ore imports by China, the world’s largest buyer of the steelmaking ingredient, jumped 30 percent to a record in September as traders and mills replenished depleted inventories. Imports reached 64.6 million metric tons, according to the China’s customs office.

To contact the reporter on this story: Jesse Riseborough in Perth at jriseborough@bloomberg.net

Last Updated: October 19, 2009 01:38 EDT