Hanlong Group announced Monday that Australia's Foreign Investment Review Board has approved its A$1.3 billion ($1.3 billion) takeover of Sundance Resources Ltd, a move that will help China reduce its dependence on iron ore imports from Australia and Brazil.

After obtaining Australia's clearance to buy 100 percent of the mining firm, Hanlong is working hard to get provisional approval from China's National Development and Reform Commission (NDRC) before Sunday, the Sichuan-based company said in an e-mail to the Global Times Monday.

Hanlong also refuted reports that the company is facing financing problems as some media said China Development Bank was reluctant to offer funding needed by August 31 for Hanlong's acquisition.

The NDRC and China Development Bank were not available for comment Monday.

Hanlong is targeting an Mbalam iron ore project in West Africa run by Sundance Resources, which has an annual turnover of 50 million tons and a reserve of about 10 billion tons of iron ore, Hanlong said.

"The acquisition, if approved, would provide more iron ore resources for Chinese steel mills at lower costs, and allow China to have more say in the international iron ore market," Liu Ning, an analyst at Beijing-based Distribution Productivity Promotion Center of China Commerce, told the Global Times Monday.

China imported 680 million tons of iron ore in 2011 and 310 million tons in the first five months of 2012, Liu said, noting that "the imports in 2012 may exceed that of 2011."

Three global iron ore producers, Vale, BHP Billiton and Rio Tinto, have monopoly over iron supply and set high prices for Chinese steel mills. The major iron ore mines of the three companies are based in Australia and Brazil, said Liu.

The proportion of China's iron ore imports from Australia reached 44 percent of the total imports in the first four months of 2012, the highest share since 2000, when Australia accounted for 48 percent of China's imports, Australian newspaper The Age reported.

The operational costs of Mbalam iron ore project is  expected to be $21 per ton when it starts production in 2014, which would make Hanlong competitive in the global market compared with the mining costs of the three global giants at around $50 per ton, Liu said, adding that "the quality of the mine is important."

Chinese companies are diversifying their iron ore supply by cooperating with small and medium-sized mines from more than 40 countries in 2011, so the reliance on the three iron ore producers is gradually decreasing, Wang Guoqing, an analyst at Beijing Lange Steel Information Research Center, told the Global Times Monday.

China also needs to enhance the quality and output of domestic iron ore mines, Wang noted. 

Moreover, consolidation is needed for the steel sector to curb oversupply, she said.

China produced 1.33 billion tons of iron ore in 2011, a 27.2 percent increase year-on-year.