Top executives of mining giant Rio Tinto have spoken with the heads of China’s new state-entity set up in August to centralise the country’s iron ore purchases.
The new agency – the China Mineral Resources Group – is seen as a response to the huge surge in prices that China faced in May 2021 when iron ore shot to a record $230 a tonne, a purchase price it had limited capacity to control as the country is dependent on foreign suppliers for the bulk of its iron ore.
That led to Beijing establishing the China Mineral Resources Group last month with registered capital of 20 billion yuan ($3 billion).
The move is widely seen as a bid gain more leverage over some of the world’s biggest mining conglomerates, such as Rio, BHP Group, Fortescue Metals Group, which are all based in Australia, plus Vale in Brazil, and others.
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Rio’s CEO Jakob Stausholm and chief commercial officer Alf Barrios held a video meeting with the senior management of the Group on September 1, the company said in a statement in Mandarin on its Chinese website on Monday.
“Rio Tinto Group is very honoured to have the opportunity to become a strategic partner with China Minerals, and work together to deepen comprehensive cooperation in various fields and achieve win-win development,” Stausholm said in the statement.
Yao Lin, chairman of China Minerals, said the group was willing to establish a strategic partnership with Rio and to work on win-win and sustainable supply chain system to develop China‘s steel industry.
China is exposed to international prices of iron ore as it must import nearly 80% of its annual consumption of about 1.2 billion tonnes of the steelmaking raw material.
- Reuters with additional editing by Jim Pollard
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