BHP Billiton matches Rio Tinto on iron ore priceTOP NewsBHP...

BHP Billiton matches Rio Tinto on iron ore price
TOP News
BHP Billiton matches Rio Tinto on iron ore price 11:52 AM

SYDNEY/HONG KONG -- BHP Billiton Ltd/Plc has secured price rises for its iron ore shipments to China similar to the near-doubling of prices won by rival Rio Tinto Ltd/Plc , Chinese industry officials familiar with the agreement have told Reuters.

Confirming an unsourced report in The Australian Financial Review, the sources in Beijing said the mills had reached an accord with BHP on Thursday after studying the up to 96.5 per cent increase that Rio won from Baosteel two weeks ago.

Li Xinchuang, vice president of the China Metallurgical Industry Planning & Research Institute, told Reuters the report was correct but declined further comment. A second source who declined to be named also confirmed the deal.

BHP had initially held out for an even greater rise, arguing that soaring freight rates made Australian ore much cheaper relative to longer-distance Brazilian grades. Brazil's Vale agreed a 65-71 per cent rise in February.

A spokeswoman for BHP, which is fighting to win a $US170 billion unsolicited bid to buy Rio, said BHP had yet to make any announcement on the outcome of its talks with Chinese steelmills and declined further comment.

The rare divergence in price deals comes at a time when BHP is also pushing to price more of its iron ore on the basis of spot market prices, irking customers such as Baosteel of China, Nippon Steel Corp and South Korea's POSCO , which are already fuming over its plans to buy Rio and create a super mining house with even more sway over resource supplies.

"Nobody can tell right now exactly how things will be next year. This year it's a new story for everything," said Mr Li.

Rio Tinto said on Tuesday that all of its Asian customers had now agreed to an up to 96.5 per cent price hike for ore delivered between April 1, 2008 and March 31, 2009, sealing a deal just before the informal negotiating deadline of June 30.

News of the agreement comes just a day after BHP won partial US antitrust clearance for its Rio bid and the same day that the European Commission is expected to announce an in-depth investigation that could last beyond year's end.