China's Baosteel said that it has exchanged ideas with Australia's major miner Rio Tinto on how to improve iron ore pricing, as part of efforts to strengthen cooperation.

Rio Tinto's iron ore head Mr Sam Walsh paid a visit to Baosteel chairman Mr Xu Lejiang on Thursday.

Baosteel traditionally leads other large domestic peers in the annual iron ore price negotiation with three global iron ore miners Rio Tinto, BHP Billiton and Vale.

However, miners decided to abandon the decades old benchmark system in favour of an index based quarterly pricing mechanism since 2009 after failing to reach an agreement with the China Iron & Steel Association.

The new scheme has forced Chinese steel mills to suffer volatile raw materials cost and low profitability. And analysts said China's intransigence in 2009 cost the country billions of dollars.

(Sourced from Thomson Reuters)