Huge Chinese state iron ore buyer still an unknown quantity

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 SA and BHP Group Ltd. — 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.

“We haven’t seen anything which disturbs our business,” Rio Tinto chief executive Jakob Stausholm said at an event in Melbourne on Tuesday, referring to CMRG. “I think they are still getting it together, but they are making umbrella purchase agreements.”

CMRG’s establishment was backed by top leaders in Beijing, Bloomberg has reported. But it’s still unclear 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.