Vale flags iron ore benchmark negotiations

Brazilian mining giant Vale wants to kick-off iron ore benchmark price negotiations for 2010-11 some time this month.

Brazilian mining giant Vale has called for the iron ore benchmark price negotiations for 2010-11 to get underway this month, according to reports from London overnight.

Speaking at the Metal Bulletin Steel Survival Strategies conference in London, the company’s iron ore director Renato Neves said he hoped the discussions would begin shortly.

Although he did not comment on the actual pricing for next year, Neves had a positive outlook for the market.

“The sea-borne iron ore market is expected to return to a very tight situation in 2010,” he said.

According to the director, Vale was operating close to full capacity after restarting mines that had been shutdown due to weak demand.

“The recovery has been very fast, faster than we could have expected,” he said.

The company is able to produce about 300 million tonnes of iron ore annually.

When contacted by MINING DAILY this morning, a spokesperson for BHP Billiton did not comment on when the company aimed to start negotiations.

A spokesperson for Rio Tinto was unavailable for comment.

Vale, BHP and Rio, the world’s three largest iron ore miners, traditionally negotiate annual benchmark prices with the world’s largest steelmakers, which are normally based in China.

However, the negotiations broke down this year after China could not reach an agreement with the three miners.

As a result, the companies have instead sold their ore on provisional contracts or through the fast-growing spot market.

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