Mining giant Rio Tinto has secured a record 96.5% increase in iron ore prices following negotiations with Chinese steelmakers, the Financial Times reported. This is well beyond the 9.5% increase paid last year and it is likely to have a knock-on effect on the cost of cars, machinery and other products, exacerbating fears of global inflation. The price increase, which works out to an average of 85% across several categories of iron ore, beats the previous record rise of 71.5% set in 2005. Traditionally, industry-wide contract prices for iron ore have been negotiated by Brazil’s Vale Do Rio Doce, with Australia-based Rio Tinto and BHP Billiton following suit. But Vale’s agreed increase of 65-71% was rejected by the Australian miners on the grounds that the proximity of their iron ore to China reduces shipping costs and therefore warrants a premium price. BHP has yet to confirm whether or not it will accept the price secured by Rio as a benchmark.