Ire over ore

A showdown between Chinese steelmakers and global iron ore producers is looming after a second of the world's big three iron-ore mining companies disclosed agreements with international steelmakers Thursday to raise the price of ore by more than China is willing to pay. Anglo-Australian Rio Tinto said it had secured a 19% increase in the price of iron ore it sells to Japanese steel mills, following similar statements from Brazil's Companhia Vale do Rio Doce SA, which settled terms with German, Japanese, Italian and South Korean steelmakers this week. China is yet to agree terms, but the deals cut with other steelmakers are likely to undermine its position, particularly given Beijing's failure to strike an early deal. It had previously been reported that other steelmakers were prepared to leave the negotiating floor open to China, the world's biggest iron-ore customer and largest steel producer by output, after iron-ore prices rose 72% in 2005. Along with Australia-based BHP Billiton Ltd, the three companies control roughly 75% of the world's exports of iron ore.