Australia-based mining company BHP has finalized a key iron ore supply agreement with Chinese state-owned iron ore trading arm China Mineral Resources Group (CMRG), marking a significant step in stabilizing its position in its largest export market, according to media reports.
The deal follows months of negotiations after earlier tensions, during which CMRG had restricted purchases from BHP amid disagreements over contract terms, as SteelOrbis reported previously.
Central role of CMRG in global procurement
CMRG represents approximately 80 percent of China’s steel mills, making it a critical player in global iron ore trade.
The agreement ensures continued access for BHP to the Chinese market, reducing risks linked to shifting procurement strategies and pricing dynamics.
Pricing resilience supported by product mix
Despite the prolonged negotiations, BHP maintained strong pricing performance, reporting a two percent increase in realized iron ore prices to $84.91/wmt in the March quarter.
This was supported by a strategic shift toward higher-value products, including output from Mining Area C, as well as increased lump sales.
Strong operational performance in Pilbara
BHP’s Western Australia Iron Ore division delivered record production of 191 million mt for the nine months ending March. The improvement was driven by higher mining volumes, better rail efficiency, and enhanced port performance, supported by infrastructure upgrades such as the Car Dumper 3 rebuild.
Looking ahead, BHP has reaffirmed its fiscal 2025-26 production guidance at 251-262 million mt (284-296 million mt on a 100 percent basis). The company’s Pilbara operations remain a key contributor to earnings, underlining the strategic importance of maintaining stable market access to China.