Australian iron ore miner Fortescue Ltd. is considering raising about 3 billion yuan ($446 million) in its first-ever panda bond offering, according to people familiar with the matter. The planned bond sale comes as the company navigates a dispute with China’s state-backed iron ore buyer that has led to a disruption in some of its exports to the country.

The potential debut in China’s onshore bond market signals Fortescue's intent to diversify funding sources despite strained trade relations. Panda bonds, yuan-denominated debt sold in mainland China by foreign issuers, would allow the miner to tap local liquidity.

The dispute with the Chinese buyer has created uncertainty for Fortescue's shipments to its largest market. Proceeds from the bond sale could be used for general corporate purposes or to refinance existing debt.

If completed, the offering would mark a significant step for Fortescue in deepening financial ties with China even as geopolitical and commercial friction persists in the iron ore sector.