Rio Tinto, Chinese mills agree on iron ore price

Australian mining group Rio Tinto reached agreement with Chinese mills on Hamersley iron ore price. According to the agreement, the prices for deliveries of Hamersley's lump ores and fine ores during the contract year commencing on April 1, 2006 increased by 19 percent. Hamersley is the wholly owned subsidiary of Rio Tinto, which conducts iron ore operations of the group in Australia. Sam Walsh, chief executive of Rio Tinto's Iron Ore group, said, “I am very pleased that the annual price discussions with our major market have been concluded in line with settlements previously established with other major Asian buyers. The settlements reflect Hamersley's ongoing commitment to the Chinese market.” BHP Billiton, the other major Australian iron ore company, had also stated yesterday that Chinese mills accepted the 19 percent iron ore price increase.