A year after China set up a company that’s expected to become the world’s biggest iron-ore buyer, the firm and how it will operate remains shrouded in mystery.
China Mineral Resources Group was established last July to consolidate purchases for a nation that accounts for around three-quarters of the world’s iron ore imports. Ranked as the 36th most important state-owned company by Chinese authorities, the firm that’s poised to upend the $160-billion global trade in the steel-making staple still doesn’t have a website, or any public contacts.
So there was a lot of interest when the state-run China Metallurgical News published the first strategic plan for CMRG last week. But those hoping for some insight into how the company intended to challenge the pricing dominance of the top three iron ore miners — Rio Tinto Group, Vale and BHP Group — were left disappointed.
CMRG said it had made progress on iron ore procurement, major national projects, and other key works in the past year. However, the plan contained no details or targets, and instead was filled with broad statements including that it would strive to become a world-class mineral resources integrated service enterprise.
The Chinese company had already began discussing supply contracts with Rio, Vale and BHP, Bloomberg reported late last year. The big miners have divulged very little about their dealings with CMRG, however.
Its establishment was backed by top leaders in Beijing, Bloomberg reported. But it’s still unclear when it will begin purchases and how much of China’s iron ore buying will eventually become centralized.
Most Chinese steel mills are due to conduct annual contract negotiations with the miners toward the end of the year. That may provide an opportunity to try and gauge the role CMRG is going to play in the global iron ore market.