China’s latest pressure campaign against Rio Tinto is also aimed at consolidating control over Chinese steelmakers, with the country’s state iron ore buyer reportedly seeking to prevent individual mills from negotiating supply terms outside its authority.
China Mineral Resources Group reportedly instructed some domestic mills to suspend negotiations with Rio Tinto covering shipments from September, Reuters reported, citing two people familiar with the matter. Two traders and an analyst told Reuters the move was intended partly to push mills that still retain their negotiating rights to transfer them to CMRG.
CMRG did not respond to Reuters, while Rio Tinto declined to comment.
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Annual iron ore negotiations typically establish volumes, cargo specifications, and shipment schedules for the following contract year. By preventing mills from settling those details independently, CMRG can increase the volume negotiated through its centralized purchasing system and strengthen its position against major suppliers.
Wood Mackenzie estimates that CMRG is already negotiating for more than half of China’s annual iron ore imports. China imports more than 1.2 billion metric tons a year, making the procurement group one of the largest commodity buyers in the world.
The strategy gives CMRG two sources of leverage. It can restrict purchases from foreign miners during contract disputes, while also pressuring domestic mills to surrender control over supplier relationships they previously managed themselves.
That internal campaign has not been frictionless. A Reuters investigation published in December found that some Chinese steelmakers privately complained that CMRG had failed to secure meaningfully better prices, charged additional commissions, and reduced mills’ flexibility when sourcing ore. Smaller mills reportedly benefited in some cases because CMRG could purchase cargoes for buyers that lacked sufficient credit lines.
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The Rio Tinto order follows earlier confrontations with BHP Group, Fortescue, and privately held Hancock Prospecting.
CMRG progressively restricted purchases of some BHP products during contract negotiations in late 2025 and early 2026. Those restrictions were removed in April after meetings involving senior BHP executives. In July, CMRG reportedly told some mills not to accept certain lower-grade Fortescue products from Chinese ports.
Fortescue said last week that CMRG’s actions were disrupting the stability of China’s iron ore supply. The company shipped 52.7 million metric tons during its latest quarter, down 5% from a year earlier.
Iron ore prices rose during Thursday’s trading. The most actively traded contract on China’s Dalian Commodity Exchange gained 2.57% to 719 yuan, or $106.54, per metric ton. The September contract in Singapore rose 2.15% to $96.45 per metric ton.
Rio Tinto had previously appeared less exposed to CMRG’s pressure than its Australian competitors. China’s state-owned Chinalco is Rio Tinto’s largest shareholder and leads the Chinese consortium working with the miner at the Simandou iron ore project in Guinea.
The mining giant delivered the first full shipment from its SimFer operation at Simandou to China during the first quarter. The company expects Simandou sales of between 5 million and 10 million metric tons in 2026, with ore sent to China for final crushing.
Those relationships have not prevented the state buyer from applying pressure. Rio Tinto iron ore chief executive Matthew Holcz said this week that bargaining power had shifted away from producers as new supply brought the market closer to balance, according to Reuters.
Rio Tinto is also becoming less financially dependent on iron ore. The company reported underlying EBITDA of $14.8 billion for the first half of 2026, up 28% from a year earlier, while free cash flow increased 75% to $3.8 billion. Copper, aluminium, and lithium generated more than half of group underlying EBITDA for the first time.
Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.