Global miner BHP Billiton Ltd
(ASX:BHP) has negotiated a nearly 100% increase in iron ore prices and moved to secure shorter-term contracts with a number of its customers throughout Asia.
Yesterday the miner announced that a significant number of customers had agreed to move from the traditional annual contract to a quarterly system.
Although BHP did not disclose the prices agreed on, The Australian reports analysts saying it is likely to have achieved a 100% increase on last year’s benchmark of US$65 a tonne.
BHP says it believes shorter-term pricing is fairer and more transparent.
The announcement comes after rival Vale revealed it had negotiated a 90% increase in iron ore prices with Japan’s Nippon Steel and Sumitomo Metal Industries for the April to June period.
The Australian reports that while Rio Tinto is yet to announce any iron ore contracts, the mining giant would be open to negotiating shorter term contracts.
Last year iron ore price negotiations with China fell apart, after Chinese firms wanted a 50% reduction in prices.
Tensions surrounding price negotiations were highlighted by the case of Rio executive Stern Hu, who was sentenced to 10 years in prison on Monday, on charges of stealing trade secrets and taking bribes.
BHP earned over $7 billion in fiscal 09.
