Rio Tinto calls off iron ore negotiations with China
05 Sep 2009
Anglo Australian mining giant Rio Tinto, has suspended talks on the acrimonious 2009 iron ore benchmark contract price negotiations with Chinese steel mills even as Beijing is buying record volumes of iron ore from Rio Tinto and the spot market.
Sam Walsh, chief executive of the London-based Rio Tinto-the world's second largest iron ore miner said at a conference in Perth yesterday that the negotiations for the April 2009 iron ore contract price that was scheduled to end on 1 July 2009 has been suspended.
Walsh said, "At this point in time we're not negotiating…..I expect they will, but I don't know when."
Analysts were not surprised at his comments since the iron ore price-negotiation deadline had already passed in April and the miner had inked a 33-per cent rate cut agreement for iron ore with Japanese, Korean and Taiwanese steel maker in May. (See: Chinese steelmakers upset with Nippon Steel's ore price-cut deal with Rio)
Walsh said that Rio Tinto was still shipping iron ore on a provisional price based on benchmark settlement arrived with other Asian steelmakers in May.
The suspension of talks has also come against the backdrop of China arresting Rio Tinto' four employees on 5 July 2009 on charges of bribing Chinese steel mill officials to get Chinese steel mills data. (See: China arrests four Rio Tinto employees)
