Anglo secures yearlong China deal for South African iron ore

Anglo American’s South African iron-ore producer, Kumba Iron Ore, has reached a yearlong supply agreement with China’s state-backed iron-ore buyer, China Mineral Resources Group (CMRG).

The deal covers supplies to CMRG member steel mills from 1 April 2026 to 31 March 2027, according to a source familiar with the matter. It excludes ore from Anglo American’s Minas-Rio operation in Brazil.

CMRG represents more than half of China’s steelmakers in negotiations with major global miners. Large producers such as BHP and Fortescue have faced lengthy and difficult negotiations because of the size of their iron-ore portfolios.

Bloomberg reported that Kumba confirmed in July that it had reached an agreement with CMRG, but did not disclose the terms. The company sold about 37 million tonnes of iron ore in 2025, with its premium, high-iron-content product making up a significant portion of its output.

Anglo American’s global head of sales and trading, Ebrahim Dadoo, said the CMRG deal represents only a relatively small portion of the company’s overall sales to China.

Anglo sells about 54% of its output into China, with additional volumes sold through spot markets and other long-term contracts.

“We’ve had very constructive engagements with CMRG, we’ve got an agreement in place with them as of the first of April, and that does impact our products that we sell to CMRG member mills,” the report quoted Dadoo as saying.

He added that the volumes covered by the agreement are “fairly small on our overall portfolio.”

The agreement comes as global miners face increasing pressure from CMRG to secure favourable pricing and terms. BHP previously endured months of negotiations before reaching a yearlong agreement, while Fortescue remains in talks.

The next major test for miners will come when the current agreements expire, with uncertainty over whether CMRG will seek further concessions during renewal negotiations.

China’s growing influence

According to Business Insider Africa, the agreement covers Kumba’s existing long-term contracts with Chinese steelmakers represented by CMRG. Only a small portion of Kumba’s overall sales to China falls under the agreement, while the rest continues through existing customer relationships and the spot market.

China accounted for approximately 53% of Kumba’s export sales in the first half of 2026, making it the company’s biggest export market. The agreement covers ore from Kumba’s Sishen and Kolomela mines in South Africa’s Northern Cape.

Business Insider Africa reported that CMRG was established by Beijing in 2022 to consolidate iron-ore purchasing for China’s steel industry and strengthen its bargaining position with major mining companies. Industry estimates suggest the state-backed buyer now handles more than 60% of China’s iron-ore imports.

The deal also comes as China seeks to diversify its iron-ore supply away from Australia and Brazil, with African projects such as Guinea’s Simandou development becoming increasingly important.

Kumba’s premium-grade ore gives it some leverage in negotiations. Its products have an average iron content of about 64%, while the company received an average export price of $90 per wet metric tonne in the first half of 2026, about 8% above the comparable benchmark, Business Insider Africa reported.

However, Kumba’s ability to meet production and export targets remains dependent on Transnet’s rail and port performance, which has been affected by infrastructure problems and other operational challenges.

For South Africa, the CMRG agreement provides greater certainty for exports, but it also brings Kumba further into a Chinese procurement system designed to increase Beijing’s influence over pricing and distribution in the global iron-ore market.