South Africa-based miner Kumba Iron Ore (KIO), a subsidiary of global mining company Anglo American Plc., has announced the conclusion of its benchmark price negotiations for the 2008-2009 contract year.
According to a statement filed to Johannesburg Stock Exchange, the South African miner expects the average benchmark export price for its products to increase by 100 to 110 percent year on year on rand/mt basis due to the higher lump ore weighting of KIO's product mix, together with a weakening of the rand, South Africa's currency.
Kumba said that the prices were "well aligned with leading settlements reached by other iron ore producers earlier this year".
As previously reported by SteelOrbis, the world's number one iron ore producer Brazilian-based Vale agreed price increases between 65 and 71 percent with large steelmakers in the first quarter of the year, while its Australian rivals BHP Billiton and Rio Tinto respectively agreed a 97 percent increase in July, and a 96.5 percent price hike in June. The agreed price increases were effective from April 1.
According to KIO Commercial Head Tino Smit, iron ore prices are to remain strong for the next three to five years, as the global miners struggle to keep up with demand.