China Manipulates Iron Ore Procurement Pricing, Australian Miners Seek Canberra's Help
The Australian Financial Review reports that China, through its state-owned China Mineral Resources Group (CMRG), has centralized 70% of its iron ore procurement, manipulating pricing negotiations. Australian miners are calling on Canberra to relax domestic competition laws to allow coordinated output and pricing. Former ACCC chairman Graeme Samuel has also changed his stance, supporting deregulation. The report also mentions a dispute between CMRG and Fortescue, and that China's steel industry's weak profits are due to overcapacity.
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- 📰 Published: June 5, 2026 at 10:15
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- 🤖 AI Analyzed: June 6, 2026 at 15:21 (28h 55m after Collected)
(Central News Agency, reporter Qiu Dezhen, Sydney, 5th exclusive) The Australian Financial Review reported today that, in response to Beijing's manipulation of iron ore procurement pricing, the Australian mining industry is calling on Canberra to relax domestic competition laws, allowing miners to coordinate output and pricing to counter the Chinese government's market intervention.
The report states that since the establishment of the state-owned China Mineral Resources Group (CMRG) in 2022, 70% of China's iron ore procurement has been centralized through this single company. As the Chinese government controls the majority of procurement through one entity, it has changed the pricing mechanism of the mining trade, giving China greater bargaining power in negotiations with Australian miners, thereby lowering raw material costs for Chinese steel mills.
The report mentions that Australia supplies 52% of the global seaborne iron ore trade. Australian companies have traditionally determined their own output or prices independently, without coordination. Notably, in 2010, the Australian Competition and Consumer Commission (ACCC) blocked a merger of the iron ore businesses of BHP and Rio Tinto.
However, Graeme Samuel, the former ACCC chairman who advocated blocking the BHP-Rio Tinto merger, has now changed his stance. He believes the Australian government should relax relevant regulations to allow the Australian mining industry to respond to the Chinese government's manipulation of pricing.
Samuel said, "Their (Australian miners') main market is China. Faced with such a large-scale market, (Australian miners) must have a certain level of bargaining power, and this should be taken into consideration." Samuel explained that Australia's relevant regulatory bodies should consider whether relaxing cooperation among Australian companies would help them compete more effectively in the global iron ore market.
The report indicates that CMRG's strategy is to gradually force Australian miners to make small concessions in pricing negotiations time and again. Over time, this would erode the revenue base of the Australian mining industry, posing a long-term threat to its survival.
The Australian Financial Review also noted that a recent negotiation dispute between CMRG and Australia's Fortescue Metals Group reflects the difficulty Australian miners face in dealing with the Chinese government's manipulation of commercial negotiations.
According to a Reuters report on the 2nd, CMRG recently signaled that Chinese companies should not negotiate for a batch of low-grade iron ore from Fortescue. Reuters, citing an unnamed source, reported that CMRG had earlier negotiated a related transaction contract with Fortescue, but the process did not go smoothly.
The Australian Financial Review mentioned that CMRG has expressed a desire to end the trend of the past 20 years where Australian iron ore producers' profits have exceeded those of Chinese steel companies. In response, the Australian mining industry cautions that the weak profits of China's steel industry are not due to excessively high profits of Australian iron ore producers, but rather because of China's steel overcapacity, which depresses Chinese steel prices and profit margins.
Additionally, the Australian mining industry believes the Australian government should designate a transaction currency for Australian iron ore exports or set other export conditions. (Editor: Wei Shu) 1150605
The report states that since the establishment of the state-owned China Mineral Resources Group (CMRG) in 2022, 70% of China's iron ore procurement has been centralized through this single company. As the Chinese government controls the majority of procurement through one entity, it has changed the pricing mechanism of the mining trade, giving China greater bargaining power in negotiations with Australian miners, thereby lowering raw material costs for Chinese steel mills.
The report mentions that Australia supplies 52% of the global seaborne iron ore trade. Australian companies have traditionally determined their own output or prices independently, without coordination. Notably, in 2010, the Australian Competition and Consumer Commission (ACCC) blocked a merger of the iron ore businesses of BHP and Rio Tinto.
However, Graeme Samuel, the former ACCC chairman who advocated blocking the BHP-Rio Tinto merger, has now changed his stance. He believes the Australian government should relax relevant regulations to allow the Australian mining industry to respond to the Chinese government's manipulation of pricing.
Samuel said, "Their (Australian miners') main market is China. Faced with such a large-scale market, (Australian miners) must have a certain level of bargaining power, and this should be taken into consideration." Samuel explained that Australia's relevant regulatory bodies should consider whether relaxing cooperation among Australian companies would help them compete more effectively in the global iron ore market.
The report indicates that CMRG's strategy is to gradually force Australian miners to make small concessions in pricing negotiations time and again. Over time, this would erode the revenue base of the Australian mining industry, posing a long-term threat to its survival.
The Australian Financial Review also noted that a recent negotiation dispute between CMRG and Australia's Fortescue Metals Group reflects the difficulty Australian miners face in dealing with the Chinese government's manipulation of commercial negotiations.
According to a Reuters report on the 2nd, CMRG recently signaled that Chinese companies should not negotiate for a batch of low-grade iron ore from Fortescue. Reuters, citing an unnamed source, reported that CMRG had earlier negotiated a related transaction contract with Fortescue, but the process did not go smoothly.
The Australian Financial Review mentioned that CMRG has expressed a desire to end the trend of the past 20 years where Australian iron ore producers' profits have exceeded those of Chinese steel companies. In response, the Australian mining industry cautions that the weak profits of China's steel industry are not due to excessively high profits of Australian iron ore producers, but rather because of China's steel overcapacity, which depresses Chinese steel prices and profit margins.
Additionally, the Australian mining industry believes the Australian government should designate a transaction currency for Australian iron ore exports or set other export conditions. (Editor: Wei Shu) 1150605
FAQ
What is CMRG?
The China Mineral Resources Group (CMRG) is a Chinese state-owned enterprise established in 2022 to centrally manage and procure the majority of China's iron ore imports.
Why is Australia considering relaxing competition laws?
Because China, through CMRG, has strengthened its monopsony position to lower iron ore prices, and Australian miners need to unite to counter this.
Why is this issue important?
Because the long-term viability of Australia's industry, which supplies over half of the world's seaborne iron ore, is being threatened by China's state-led pricing strategy.