China's state iron ore buyer reached an agreement with Anglo American (AAL.L) in April over an annual supply contract for the key steelmaking ingredient, three sources with knowledge of the matter said on Friday.
China Mineral Resources Group (CMRG), established in 2022 to assert more pricing power in the iron ore market where China is the dominant buyer, has stepped up efforts to win better terms for Chinese steelmakers grappling with dwindling demand and shrinking margins.
Bloomberg reported the news earlier on Friday.
Under the agreement, which had not previously been reported, CMRG became exclusive sales agent in China for some iron ore from Anglo American's Kumba unit in South Africa starting from April, the sources said.
Two of them said the deal was for around 10 million metric tons, to be supplied to CMRG's member steel mills.
The contract will last through March 2027, one of them said. The sources all declined to be named as they were not authorised to speak with media.
Kumba's iron ore sales stood at 18.6 million tons in the first half of the year, with sales to China accounting for 54% of that.
Ebrahim Dadoo, Anglo American's global head of sales and trading, said on an earnings call on July 28 that not all of that 54% went to CMRG, without providing further details.
CMRG did not immediately respond to a request for comment. Anglo American declined to comment.
In April, CMRG reached a supply agreement with BHP Group (BHP.AX), ending a months-long dispute during which Chinese steelmakers and traders were barred from buying some BHP iron ore brands.
