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Rio Tinto Talks to China’s New Iron Ore-Buying Agency

The move by Beijing is seen as a bid gain more leverage over some of the world’s biggest mining conglomerates


Rio Tinto execs have spoken to heads of the China Mineral Resources Group.
Rio has said it is eager to achieve 'win-win developments' with the new state buying agency. The Rio Tinto logo is displayed on a visitor's helmet at a mine in Boron, California in this image from late 2019. File photo: Patrick Fallon, Reuters.

 

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.

 

ALSO SEE:  Rio Tinto in $3.3bn Deal for Control of Mongolian Copper Mine

 

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

 

 

ALSO SEE:

Rio Tinto, BHP, Fortescue Results to Put Focus on China Demand

 

China hopes metals sell-off will calm molten market

 

Iron ore is the latest front in China’s commodities war

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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