BEIJING: China discovered five billion tonnes of iron ore deposits last year, the government said.

More than three billion tonnes were located in the northeastern province of Liaoning, with the rest found in Hebei, Shandong, Anhui and Sichuan, said Zhang Hongtao, chief engineer of the Ministry of Land and Resources.

One billion tonnes of reserves in Hebei would be easy to mine because of their shallow depth, said Zhang, quoted in a statement posted on the ministry's website on Friday.

China, the world's biggest producer of steel, is also the largest importer of iron ore, importing around 50 percent -- or 443.45 million tonnes -- in 2008.

Steel production over the first nine months of last year added up to 618.6 million tonnes, according to the China Iron and Steel Association.

Each year, Chinese steelmakers enter bitter negotiations with the world's top three mining giants -- Brazil's Vale and Anglo-Australian companies Rio Tinto and BHP Billiton -- over the price they will pay for iron ore.

Annual iron ore pricing negotiations traditionally begin with Japan around November and take place alongside similar negotiations. China and Beijing's massive imports have been a prime driver for price rises in the past few years.

The three firms have sidelined Beijing from annual talks to set a benchmark contract price, the Financial Times reported earlier this week.

The companies plan to present a "take it or leave it" price to Chinese steel mills once negotiations with Japan are complete, the report said.

"As far as I am concerned, they (Chinese negotiators) could come over to Australia if they want to talk," an unnamed executive told the paper.