MARKET TALK: Rio Tinto Will Play Hardball On Iron Ore - Citi

16th Jun 2010 02:26

0126 GMT [Dow Jones] Rio Tinto (RIO.AU) Iron Ore CEO Sam Walsh tells analysts the company will play hardball if any Chinese steel mills try to renege on quarterly iron ore pricing arrangements, Citi says. "It will cancel quarterly agreement and charge on a pure spot basis, leaving mills with large exposure to the market and reduced resource security," Citi says. Steel mills have been happy enough to accept the quarterly price while it has been lower than spot prices but it remains to be seen if they will be as compliant when a better price is available on spot. Walsh also tells analysts the company remains confident of sufficient demand growth for iron ore despite the negative sentiment of recent weeks and remains committed to the production joint venture with BHP Billiton (BHP.AU). Walsh also says the Australian Government's planned new mining tax is having an impact on Rio's iron ore development plans. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires June 15, 2010 21:26 ET (01:26 GMT)