Geoff Wedlock knows better than most how to succeed in the iron ore sector, and Pallinghurst chairman Brian Gilbertson is counting on his 40-year history in the industry to drive ambitious expansion plans.

Mr Wedlock, chairman of Jupiter Mines, began his career in the steel industry with BHP at Wollongong before going to Western Australia to work for the company's iron ore division.

"Iron ore always has a market and it is a business which I've always found interesting," he said.

He worked his way up the ranks to head BHP Iron Ore, so it is no surprise Mr Gilbertson was keen to put him at the helm of his Australian "steel feed" plans to supply raw materials to steelmakers.

Mr Gilbertson's Pallinghurst Resources and his international backers struck a deal this month to take up to 85 per cent of Jupiter Mines in a $245 million deal that gives the emerging miner a 49.9 per cent stake in a world-class manganese project in South Africa.

Jupiter also has iron ore interests in the Yilgarn region in Western Australia, where it plans to lead consolidation in the sector.

Mr Wedlock, who was responsible for developing Portman's iron ore business in the Yilgarn region, knows what is needed to succeed in the sector, having watched the industry struggle before the good years rolled in.

"Iron ore in US dollar terms declined in price from 1980 through to 2004, so it had a long history of struggling," he said.

"What happened out of the price decline, led to the bigger companies getting bigger, leading to BHP, Rio Tinto and Brazil's Vale holding 70 per cent of the seaborne trade."

Mr Wedlock said it was a struggle to develop the first mines in the Pilbara because of the significant capital that had to be put in before one tonne of ore could be produced.

"There were times in the early days when the oil shocks happened when the business was very tough and it didn't attract much investor interest," he said.

"It was perceived as too basic a business, compared to base metals."

But China's emergence rapidly changed the market's perception of the iron ore sector.

"I was surprised at the rate of growth of China," Mr Wedlock said.

"It has been far quicker and more significant than what happened in Japan or Korea and it has caught the industry a bit by surprise, which led to supply shortages and rising prices."

Iron ore pricing has long been a contentious topic between suppliers and customers, and this year's round of talks between the major miners and Asian steel mills is not short of controversy.

For the first time, the three majors, BHP, Vale and Rio, are united in their push to change to the pricing structure, with a growing preference for quarterly contracts rather than annual negotiations.

Mr Wedlock said it was likely shorter-term options would eventually be agreed on.

"These large steel mills, with large blast furnaces, need a steady, reliable ore supplied to them," he said.

"So the structure of supply needs to be long-term contracts but it will be a matter of how they are priced, and it seems shorter-term pricing is being sought."