Sam Walsh, CEO of the iron ore division of Australian miner Rio Tinto, has stated that iron ore contract prices will fall in 2009, the first decline in seven years, based on market conditions, but not by the 50 percent asked by Chinese steelmakers.
"Certainly we need to recognize the fundamentals of the market and the market would show that there does need to be a downward adjustment," said Mr Walsh, before going on to say that he disagreed with analysts' forecasts of a price fall of up to 50 percent.
Turning to Rio Tinto's $19.5 billion deal with Chinalco, Mr Walsh said "Nothing changes on iron ore price negotiations once the transaction is completed," stating that Rio Tinto negotiated its biggest ever price increase with China last year while Chinalco was a significant shareholder.