(Adds percent increases, background)
LONDON (Thomson Financial) - BHP Billiton confirmed it reached an agreement
with China's Baosteel on the price for iron ore deliveries for the contract year
starting April 1, 2008, with prices matching those secured by takeover target
Rio Tinto.
The world's largest resources company secured a 79.9 percent price rise for
fine iron ore and a 96.5 percent increase in the price of lump iron ore.
The mining group said it is now seeking to settle agreements with the
remainder of its customers under existing long-term supply agreements both in
China and other countries.
Both Anglo-Australian miners will receive higher prices for their iron ore
than Brazil's Vale, although an agreement was reached later in the year than
usual, after the companies sought a "freight premium" to reflect the lower cost
of shipping ore to China from their mines in Australia than from Brazilian
mines. Vale, the world's largest iron ore producer, secured a 65 percent rise
for fines and a 71 percent gain for lump iron ore.
On Thursday, BHP Billiton said the U.S. Department of Justice cleared its
proposed acquisition of Rio Tinto, meaning the world's biggest diversified
resources company has in effect received U.S. approval. Steelmakers, the biggest
users of iron ore, have expressed concern that the proposed merger would place
too much pricing power in the hands of too few suppliers.
julie.crust@thomsonreuters.com
jc/jc/ajb
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