Following the success of BHP Billiton Ltd
(ASX:BHP) and Brazil’s Vale in securing quarterly iron ore pricing contracts, global miner Rio Tinto Ltd
(ASX:RIO) says it is currently negotiating similar contracts with its customers.
The move is a shift away from the traditional annual contracts that have been in place.
Chief executive of iron ore and Australia, Sam Walsh, says Rio’s position reflects the recent structural shift in the iron ore market away from benchmark pricing.
Mr Walsh says the move is in line with the company’s recent comments that benchmark pricing only works if it reflects market fundamentals, otherwise the system would need to change.
BHP recently secured nearly double the price for its iron ore per tonne.
Rio says as discussions are still underway, no further guidance is possible at this stage.
Rio Tinto earned $5.4 billion in 2009.
