Mining group sets a benchmark for the price of iron ore

Rio Tinto, the mining group, put pressure on the price of iron ore by agreeing to slash the contract price with a major customer.

Rio agreed to cut the price of Iron ore deliveries with Japan’s Nippon Steel Corporation, a major customer, by an average of 37%.

Under the agreement Rio will charge Nippon Steel 97 US cents per dry metric tonne of fines and 112 cents per metric tonne of blended lump. Overall the price reductions were worth 37 percent, according to reports.

Rio Tinto Iron Ore chief executive, Sam Walsh said: ‘We believe this settlement is a realistic outcome for both parties - one that reflects the global market for iron ore and the current challenging market conditions facing our customers.’