Do you have another market for them where they can sell 1 billion tons of iron ore a year ?
You literally let an Australian company process it to higher value products and ship it? That's literally what every oil major has done with their resources.
Australia itself doesn't have the demand for that much steel internally - China does (and exports its excess production).
Which is exactly what Australia could do if it made a bunch of steel.
With no small amount of it exported to Australia.