China’s state-backed minerals buyer has secured a one-year agreement for iron ore supplied by Anglo American’s South African subsidiary, extending Beijing’s influence over the pricing and distribution of one of Africa’s biggest mineral exports.
The agreement between China Mineral Resources Group, or CMRG, and Kumba Iron Ore took effect on April 1 and will run for one year, Bloomberg reported, citing people familiar with the arrangement.
Kumba had previously confirmed reaching an agreement with CMRG but did not disclose its duration, pricing formula or contracted volumes.
The South African producer said during its July interim-results call that the arrangement covered existing long-term contracts with Chinese steelmakers represented by CMRG.
Only a small portion of Kumba’s overall sales to China is covered, according to the company. The remaining cargoes continue to be sold through existing long-term customer relationships and the spot market.
