Rio seeks rise in benchmark prices

Iron ore price negotiations are gaining in intensity in Singapore.

Rio Tinto is demanding a 40% rise in the benchmark iron ore price following negotiations with Japanese and Korean steel mills.

According to the 21st Century Business Herald, Rio has sought the nearly double price rise in this first round of pricing contracts after negotiations last year saw an agreement to a higher 2010 pricing scheme.

When contacted by MINING DAILY, Rio Tinto declined to comment.

It was earlier reported in MINING DAILY that the major iron ore players had gathered in Singapore for benchmark price negotiations.

The Chinese steel mills such as Baosteel and Wuhan Iron and Steel have met with Rio Tinto, BHP Billiton and the Brazilian miner Valé to arrange a benchmark iron ore price after negotiations failed previously in 2009, resulting in Chinese companies paying an ever rising spot price after they refused to agree to the set benchmark price.

When BHP was contacted by MINING DAILY, they declined to comment on iron ore negotiations.

According to the report, the Chinese are unlikely to accept any raising of the benchmark price above 30%, with a person close to the negotiations quoted as saying that the price hike may be around 20% to 30%.

Another source was reported as saying that the Korean and Japanese steel companies could be willing to accept up a 40% rise in the benchmark.

Negotiations continue.

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