China’s state iron ore buyer has agreed a new supply deal for the key steelmaking ingredient with Rio Tinto (ASX:RIO), people with knowledge of the matter said.
China Mineral Resources Group (CMRG) verbally notified some steel mills of the agreement on Wednesday without giving further details, they said.
CMRG will start on Thursday to collect information on volumes that each mill needs to buy from the miner, two of the people said.
CMRG and Rio Tinto did not immediately respond to requests for comment.
It was not immediately clear how much Rio Tinto iron ore would be allocated under the contract.
Reuters reported in early August that CMRG directed some steel mills to halt negotiations with Rio Tinto for shipments from September.
Beijing established CMRG in 2022 as part of China’s efforts to strengthen its bargaining power with major miners by centralising iron ore procurement. The move was aimed at securing better terms for Chinese steelmakers, which have faced thin margins and weak domestic demand.
(Reporting by Reuters staff; Editing by Mark Potter)
Image: Rio Tinto
