China Steel Association Says Ore Talks Not Over

Associated Press

Annual iron ore price negotiations are "definitely not over," a negotiator for the China Iron and Steel Association told the Caijing financial news organisation, but acknowledged that some mills had agreed to a 33 percent cut as reported earlier.

Reuters reported on Wednesday that in the absence of a formal settlement between the Chinese steel industry and iron ore suppliers Rio Tinto and BHP Billiton, major Chinese mills had agreed to pay 33 percent less than the 2008 prices, in line with settlements reached by
Japanese and Korean mills.

The price agreed by the Chinese mills is not final, the negotiator said, adding that "once the Chinese iron ore price comes out, they will be reimbursed or pay more based on that final price."

Sources had told Reuters that the China Iron and Steel Association, which had taken over as lead negotiator in the talks this year and was holding out for a better price, would not formally acknowledge the mills' interim deals. 

This year's negotiations have been particularly fraught, and reached an impasse earlier this month when four members of Rio's iron ore team in Shanghai were detained for allegedly improperly acquiring state secrets.

China's flagship steel mill, Baosteel, said in a statement sent to Chinese media that none of its employees had been detained or assisted in the investigation. Chinese media had earlier reported that the lead negotiator for previous years' talks, who hailed from Baosteel, was among those investigated in the probe.

Traditionally, all the mills settle at whatever price is reached between any mill and any of the three miners, BHP , Rio and Vale. 

The Chinese mills' agreements range in duration, the sources had said.

Rio Tinto Moves Iron, Steel Staff Out Of China   

Separately, the Australian Financial Review reports that Rio has evacuated staff in China involved in research of the iron ore and steel industry in response to the detention of some of its iron ore traders by state authorities.

The unsourced report from Shanghai also said other foreign groups were moving employees out of China until conditions there become more certain.

A Rio Tinto spokesman in Melbourne, Ian Head, said he could not immediately comment on the report, which said the unidentified number of staff were moved out on Wednesday.

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Stern Hu, Rio Tinto's head of iron ore marketing in China, and three other members of the Shanghai-based iron ore team were detained in early July on suspicion of stealing state secrets.

Hu, a Chinese-born Australian citizen, was accused of obtaining and passing on the Chinese industry's negotiating position, sources with knowledge of the circumstances have said.

Rio Tinto's China team carry out some negotiations and manage operational details of term contracts for iron ore, a key ingredient in steel making, as well as tracking market information.