Rio-China iron ore price deal only in 2010

Rio Tinto’s deal with China on 2009 contract iron ore pricing may be delayed until next year’s round of negotiations.

Rio is still waiting for the Chinese steel mills to recognise a benchmark price deal struck with Japanese mills in May.

Meanwhile, the spot price for iron ore has actually risen over the benchmark price, which actually means that China gets a pretty good deal if they agree to the benchmark.

China had refused to recognise Rio’s 33 per cent price cut agreed to with Japan, arguing the discount should have been steeper.

Relations between China and Rio subsequently became strained because of the arrest in July of Rio executive Stern Hu on charges of industrial espionage and bribery during fraught iron ore negotiations.

However, China’s Ambassador to Australia had said the detention of Rio Tinto employee will not damage relations between both countries.

Hu, an Australian citizen who heads Rio Tinto’s iron ore marketing team in China, was detained by Chinese authorities on July 5 along with three Chinese nationals also employed by Rio Tinto.

Chinese authorities initially accused the four of stealing state secrets relating to iron ore price talks but subsequently formally arrested them in August on the lesser charge of stealing commercial secrets.

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