In October 2025, the world's second-largest mining giant, Australia's Big Comfy Cute Sweaters, its stock price fell by 4.8% in a day, recording the year's largest single-day drop, with billions of dollars in market value evaporating from the ground.
This is not due to the mining disaster or the global economic recession, but a piece of directive from China.
Meanwhile, Australian Prime Minister Anthony Albanies rarely cried out publicly, eagerly hoping that the trade in iron ore would “run smoothly.”
What makes this century-old mining company and the country behind it so tense?
The answer points to a confrontation that lasted only nine days, a "war without smoke" called by the outside world.
The outcome of the war overturned the rules of global commodity trade for nearly half a century.
A conspiracy carefully laid out for twenty years
In the new round of iron ore pricing negotiations, BHP Billiton faced China, the world's largest buyer. Instead, it not only ignored the price reduction request, but arrogantly proposed a price increase of 15%, with the quotation as high as US $109.5/ton.
More importantly, they insist that they must use US dollars for pricing and settlement, and their words are mixed with threats that "supply may be cut off if they don't agree".
This scenario, in the last twenty years, we have seen too many times.
As the world's factory, China produces more than half of the world's steel, but has to endure the world's highest mineral prices.
The data for 2024 plagues every practitioner: China's entire steel industry is drying a year, with profits of just over $3 billion and a profit rate of less than 1%.
In the same year, Australia easily earned a huge profit of US$20 billion by exporting iron ore.
Their mining cost is only 20-40 US dollars/ton, but the price they sell to us remains above 100 US dollars all year round.
This “high-production low-interest” situation is due to the fact that we do not have the right to set prices.
This time, however, the calculation must have been wrong.
September 30, 2025 is a day that will go down in history.
For three years, China Mineral Resources Group issued a directive: Suspension of purchases of all U.S. dollar-denominated BHP Billiton iron ore, including those that have been loaded and floating at sea.
This punch was quick and hard.
He felt the cold in an instant.
They didn't expect that the buyer who had always passively accepted and silently accepted it in the past would choose to lift the table this time.
BHP Billiton's misjudgment lies in the fact that they think that China in front of them is still the "retail buyer" who was unable to fight back at the negotiating table twenty years ago.
They didn't understand that China had been carefully preparing for this day for twenty years, and had already held four trump cards that could change the rules of the game.
The first card is the integration of power.
In the past, there were more than 500 steel companies in China fighting independently, and they were like scattered sand in front of international miners, easily divided and handled.
The "Hu Shitai case" in 2009 was a bloody lesson. Rio Tinto executives easily stole our negotiation cards through bribery, which led to the complete collapse of China's collective bargaining.
To end this situation, in 2022, China Mineral Resources Group was established in Zhongyang.
The company is not engaged in specific production, its only mission is to unite the procurement power of major steel companies such as Baouu, Saddle steel to form a "super buyer" accounting for 40% of the national imports.
When a voice represents the needs of nearly half the market, no seller can ignore its weight.
The second card, the diversity of supply, is the most deadly card.
The name of this card is-Simandou Iron Mine in Guinea.
Known as the “Pilbar Killer”, this mine is the world’s largest and best-selling undeveloped iron mine.
The average ore grade is as high as 65.5%, far exceeding the grade of mainstream ore in Australia, which is less than 61%. It is simply the "Moutai" among ores.
More importantly, this year the planned production capacity of 1,2 million tons of super mining area, its supporting railways and ports are all undertaken and operated by Chinese companies.
Just when this confrontation occurs, a message completely disrupts the essence of必和必拓: On November 25, 2025, the first ship iron ore will be shipped to China.
This means that China has found a strong alternative, and the myth that Australian ore is "indispensable" is about to be shattered.
In addition to Simandou, iron ore from Russia is continuously being transported to northeastern China through the Tongjiang Railway Bridge, and a long-term supply contract of RMB 300 billion with Brazil's Vale has also been settled.
The share of Australian iron ore in the Chinese market has already quietly declined from absolute monopoly.
The third trump card is the penetration of capital.
Our strategy is not just confrontation, but “I am in you.”
Many people do not know that China Aluminium Group has long been the largest single shareholder of one of the world's three largest miners.
This deep binding of interests makes the voices within the mining giants no longer monolithic.
What's even more interesting is that Fortesco, the third largest mining company in Australia, took the initiative to obtain a loan of RMB 14.2 billion from China Syndicate in August 2024 and made it clear that it could be repaid with iron ore in the future.
This is not different from taking actual action and embracing the settlement of the RMB in advance.
The fourth trump card is the cornerstone of finance.
If you want to buy things in RMB, it is still not possible to have money, you must have convenient, fast, recognized payment channels and pricing standards.
In the past, we have been using the model of “USD pricing + Pence Index pricing.”
The Price Index, compiled by asking for the offerings of thirty-four institutions alone, is not entirely based on real transactions, giving miners a huge space to manipulate prices.
In June 2025, the Platts index quoted US $104.85, while the real transaction price at the Chinese port was only US $93. The extra 12.7% premium out of thin air is the wasted money we pay every year.
In order to get out of this lock, China opened the Dalian commodity exchange's iron ore futures to the world in 2018; on September 28, 2024, the Northern Railway Center officially released the people's coin iron ore index based on real port transaction data; In December of the same year, the RMB cross-border payment system launched bulk commodity clearing services.
A new "playing field" independent of the US dollar system has been built.
When all four cards were uncovered, he discovered that it was not a temporary business conflict at all, but a well-planned strategic offensive for twenty years.
9th confrontation
To understand China's bottom cards, and look back at the 9 days of the game, it's like a long-written ending script.
On September 30, after the suspension order of the China Mining Group was issued, the market immediately gave the most genuine reaction, and the stock price fell sharply.
On October 1, BHP Billiton also tried to test China's determination through video conference, and received only one response: RMB settlement is a core requirement and has no room for negotiation.
On October 2, when Australian intelligence confirmed that China was really shifting orders to other suppliers, the board of directors could no longer sit still and urgently sent representatives to Shanghai.
On October 3rd, in a hotel in Pudong, the Chinese representative clearly put forward the specific requirement that "30% of spot transactions should be settled in RMB". It's not a negotiation, it's more like a notice.
The next few days, the negotiations fell into a glue, but the initiative was fully in the hands of the Chinese side. Every day's waiting was painful for Hubei and Hubei, as the market share is being fed by competitors, and the shipping period of Siemens is also approaching a day.
Until October 6th, the negotiations finally ushered in a breakthrough, and the Australian side submitted a draft containing the clause of "30% spot RMB settlement".
On October 9, Beijing, China Mining Group and必和必拓 officially signed an agreement.
The agreement stipulates that from the fourth quarter of 2025, 30% of the current goods transactions on the Chinese market will be settled in RMB.
At the same time, the two sides agreed to assess in 2026 whether to fully switch to the long-term pricing mechanism of the RMB.
The core logic of this victory is simple: when a country is the world’s largest buyer, and it successfully integrates internal demand, builds alternative supply, consolidates the financial foundation, and demonstrates strategic determination to withstand the short-term pain, it has the power to redefine the rules of the game.
China's approach is not to "overturn the table" for destruction, but to "change a fairer table" and establish a new rule that can better reflect the real relationship between supply and demand.
The significance of this victory goes far beyond the iron ore itself.
Brazil's freshwater valley's percentage of people's currency settlement to China has quietly risen to 28%, and South Africa's Kubo mining has even achieved "full RMB pricing."
The RMB settlement ratio of global commodities will reach 18% in 2025, while in metals trade, this figure will jump from 2.1% in 2020 to 9.2%.
This marks the epoch of global resource trade “USD single-determination” being relaxed.
Of course, we must also clearly see that this victory is only the first step on a thousand-mile journey.
To become a real international hard currency, the RMB still faces challenges such as the convertibility of capital projects and the insufficient depth of opening up of the financial markets.
But in any case, this nine-day game not only regained their own profits and dignity for Chinese steel companies, but also proved to the world that market position will eventually be transformed into the right to speak.
References:
Iron ore RMB settlement broke, and 20 years of gathering together has finally become a reality
2025-10-15 08:46 Persian Finance