Rio Tinto reaches deal with buyer negotiating more than half of China's imports
Key Facts
China Mineral Resources Group, China's state iron ore buyer, has reached a new annual supply contract with Rio Tinto, Reuters reported, citing sources familiar with the matter. The agreement is significant because of the group's role in negotiating ore purchases: it handles negotiations for more than half of China's annual import volumes, according to Wood Mackenzie estimates cited by the agency. The Chinese government's official website describes the group as a wholly state-owned enterprise under central government administration. The group and Rio Tinto did not immediately respond to requests for comment on the reported agreement, according to Reuters. The contract follows the group's instruction to some steel mills to halt negotiations with Rio Tinto over September shipments, according to an earlier Reuters report published in August.
The Chinese government had linked the launch of China Mineral Resources Group to a mandate to secure critical mineral resources. The government statement said the group's establishment was intended to "ensure supplies of critical mineral resources" by drawing on domestic and international markets and resources. Rival BHP announced the completion of its negotiations with the Chinese group on iron ore sales contracts before Rio Tinto. The announcement came in BHP's operational report issued in April, marking another precedent for negotiations between the group and ore producers. BHP said in the report: "We have concluded negotiations on iron ore sales contracts with China Mineral Resources Group."
On the operational front, Rio Tinto said its global iron ore sales reached 90.8 million tonnes in the third quarter of 2026. That represented a 3% increase from the same period a year earlier, according to the company's production results. In the Pilbara, iron ore sales rose 2% year-on-year during the same quarter. At the Simandou project, the annualised production rate reached about 10 million tonnes during the third quarter, according to Rio Tinto's statement. That rate was calculated on a 100% project basis and represents an annualised rate of production during the period, rather than the volume actually produced over a full year.
In China, industrial output growth accelerated to 5.5% year-on-year in September, according to figures reported by Reuters. The reading matched the agency's poll forecast, which also pointed to growth of 5.5%. Growth had stood at 5.2% in August before picking up the following month. By contrast, Chinese property investment fell 20.6% year-on-year in the first nine months of 2026. The decline had been 19.9% in the first eight months, meaning the contraction deepened when September was added to the cumulative period, according to figures reported by Reuters.
Figures from China's National Bureau of Statistics showed a decline in steel products output in September, alongside accelerating overall industrial growth. Output of these products stood at 11817 in units of ten thousand tonnes, according to the statement published on 19 October. Production fell 3.8% from the same month a year earlier. Cement output also declined in September, according to the National Bureau of Statistics. The annual decline in cement production was 5.3%, alongside the drop in steel products and the deepening contraction in property investment over the cumulative period ending that month.
As the next step in implementing the agreement, China Mineral Resources Group will begin collecting information from mills on Thursday, according to the sources familiar with the matter who spoke to Reuters. The information concerns the volumes mills need to purchase from Rio Tinto. Regarding its future production plans, Rio Tinto has set a target to raise Simandou's annualised production rate to 60 million tonnes. The company aims to reach that rate during the second half of 2028, according to its operational results. The target refers to the annualised production rate once reached, rather than the total volume of production targeted during that period.