Kumba agrees year-long supply deal with China's state iron ore buyer

Kumba Iron Ore has signed a one-year supply agreement with China Mineral Resources Group (CMRG), the state-backed body that now negotiates iron ore purchases on behalf of a large share of China's steel industry, Bloomberg reported on 14 August.

The contract covers deliveries to CMRG member mills from 1 April 2026 to 31 March 2027. It applies to Kumba's South African ore only and does not include Anglo American's Minas-Rio operation in Brazil. Kumba had confirmed in July that it had reached terms with CMRG but gave no details of duration or pricing.

Small slice, big signal

Ebrahim Dadoo, Anglo American's global head of sales and trading, said volumes under the agreement were "fairly small" in the context of the group's overall portfolio. Bloomberg estimated that Kumba could supply CMRG with 8 to 10 million tonnes, against total sales of about 37 million tonnes in 2025. Dadoo said about 54% of output is sold into China, including spot cargoes and long-term contracts outside the CMRG framework.

The deal follows a similar year-long agreement between CMRG and BHP, concluded after months of friction in which Chinese buyers were told to avoid certain BHP products and which, according to reports, moved more of the pricing into yuan. Fortescue was still negotiating at the time of the Kumba report.

A shift in bargaining power

CMRG was set up in 2022 under Beijing's state asset regulator to consolidate iron ore buying. In January, Fortescue co-chief executive Dino Otranto told the Financial Times that the organisation had become the key risk for exporters, arguing that leverage was moving to the buyer as new supply comes on stream.

Kumba's marketing head Timo Smit struck a calmer note when the company released its 2025 results in February. He estimated that CMRG already handled perhaps 70% to 75% of Chinese iron ore imports and acknowledged that the balance of power was shifting a little, but argued that China's reliance on imported ore had not fundamentally changed. He said at the time he expected the talks to be concluded positively during the year.

China took 56% of Kumba's export sales in 2025, up from 54% in 2024, even though the company's medium-term aim is to sell 45% to 55% of its ore to markets outside China.

Next test

For a producer whose premium product earns a price above the benchmark, the terms of such contracts matter as much as the volumes. With the agreement expiring at the end of March 2027, the next question is whether CMRG will seek further concessions when the contracts come up for renewal, particularly as Guinea's Simandou project adds high-grade supply that competes for the same Chinese customers.

Sources

• Miningmx: Kumba seals China iron ore deal, 14 Aug 2026
• Miningmx: Kumba upbeat on iron ore contract talks with China, 19 Feb 2026
• Miningmx: Chinese buyer emerges as iron ore market threat, 14 Jan 2026

Photo: Iron ore ship-loading infrastructure at the Saldanha Bay export terminal. Sibusiso Polite Ngubeni, Wikimedia Commons, CC BY-SA 4.0.