China’s drive to reduce steelmaking emissions has sparked record price premiums for high quality iron ore products which could be worth more than $3 billion for both BHP and Rio Tinto this year while also turning a Tasmanian minnow into a market darling.

Surging premiums for iron ore pellets and lump comes as iron ore futures surged again on Monday while a partner to the dormant Australian Premium Iron (API) project expressed optimism that a smaller version of the project could soon be developed.