Eastern China-based Laiwu Iron and Steel Group,  one of China's major steel mills, entered into a long-term iron ore supply agreement with African Societe Nationale Industrielle et Miniere (SNIM) last Tuesday, a Laiwu Steel official told Interfax today.

The agreement  will  secure  long-term  and  stable iron ore supply from African  mines  for  Laiwu  Steel,  and is valid from next year onwards. Laiwu Steel  is  SNIM's  first  Chinese  long-term  strategic  iron  ore partner.

The Laiwu  Steel  official,  who  asked to remain anonymous, declined to comment  on either the agreement validity period or quantity of iron ore Laiwu Steel will receive from SNIM.

An anonymous official from Cargill, the multinational trading house that will act  as  intermediary  agent  for the deal, revealed that SNIM will supply Laiwu  Steel  with  approximately  1 million tons of iron ore per annum, but declined to further comment on the deal.

A total  of  85  percent of Laiwu Steel's iron ore imports are currently fixed through long-term contracts with three major iron ore suppliers.

SNIM, located  in  Mauritania,  is  Africa's  second  largest  iron  ore producer  with  a capacity of 12 million tons of iron ore per annum. The company mainly supplies European markets.

Laiwu Steel intends to produce 11 million tons of crude steel this year, up 1.85  percent  from  last year, a top Laiwu Steel official previously told Interfax.