China CMRG halts Rio Tinto talks

China's state-owned iron ore buyer, China Mineral Resources Group (CMRG), has directed some Chinese steel mills to halt negotiations with Rio Tinto (corporation) for shipments from September, according to two sources. This move escalates pressure on the world's top iron ore producer during annual supply talks. CMRG has been using its buying power to secure better terms for Chinese steelmakers by restricting purchases from major miners. The directive aims to pressure mills that have not yet ceded negotiation rights to CMRG, thereby increasing CMRG's procurement volume and bargaining power. CMRG is negotiating for more than half of China's annual iron ore imports, per Wood Mackenzie estimates. CMRG has already targeted other Australian producers, including BHP, Fortescue, and Hancock Prospecting. Australia supplies over half of China's iron ore imports, making it the largest source. The news lifted iron ore futures: Nigerian Commodity Exchange's most active contract rose 2.57% to 719 yuan per ton, and Singapore Exchange's September contract rose 2.15% to $96.45 per ton. Rio Tinto (corporation) declined to comment, while CMRG did not respond. BHP previously faced purchasing bans that were lifted after a visit by incoming CEO Brandon Craig. Fortescue criticized CMRG's actions as undermining supply stability. Rio Tinto (corporation)'s iron ore CEO Matthew Holcz acknowledged that negotiating leverage has shifted away from producers. Australian miners have sought government help, but Canberra may avoid confrontation given recent trade tensions.