Reuters reported that the Brazilian mining institute Ibram said that the threat by European steel companies to take local iron ore miner Vale before the European Commission on antitrust charges was a desperate act of colonialism.

Mr Paulo Vargas Penna president of Ibram said “It's clear the Europeans are defending their corporate and economic interests in a modern form of colonialism and mercantilism, imposing prices on raw material imports and selling their products to the world at market prices.”

Mr Penna said “This is a desperate attempt to disrupt price negotiations between clients and suppliers in the iron ore sector by manipulating and distorting institutions like the EU Commission.”

Mr Penna said if EU steel makers were allowed to return to the annual benchmark system, which they and Asian steel makers abandoned during the financial crisis in 2009 when demand for steel plummeted and spot price for ore dropped below the benchmark, it would hurt Brazil's trade balance.

Mr Penna said “A quarterly pricing system based on an independent spot market index is a much more professional and transparent way of doing business today Vale's proposal will eliminate distortions in the iron ore business and attempt to base it on market fundamentals.”

European steel industry body EUROFER, who had said earlier in March that a planned 80% to 90% increase in iron ore prices by the iron ore industry could hurt European economic recovery, said on Wednesday that it would ask EU antitrust regulators to look into whether Vale is abusing its dominant position in the market. EUROFER could file a complaint as soon as this week.

Vale, the world's biggest producer of iron ore, said recently that it would push to implement a more market driven pricing system for ore that it sells to steel companies, abandoning a four decade old benchmark system.

(Sourced from Reuters)