Influential mining investor Evy Hambro expects wide discounts on lower-grade iron ore to persist and has warned Western Australian exporters will face an increasing challenge to maintain the quality of their iron ore.

China's preference for higher-grade iron ore has been one of the major trends in the mining sector in 2017, and has led to Fortescue Metals Group shares recently under-performing those of rival exporters BHP Billiton and Rio Tinto, which sell higher-grade ores.