Reuters reported that small capped Australian iron ore miners are carrying on business as usual with Chinese steelmakers despite protracted negotiations between China and mining giants Rio Tinto and BHP Billiton to settle an annual benchmark price.

The current pricing debacle with China's steel industry has not hampered the small cap's negotiations with the world's largest steelmaking country and they have settled prices using methods that satisfy their Chinese customers.

Mr David Flanagan MD Atlas said on the sidelines of the Diggers and Dealers mining conference in Western Australia that Atlas Iron which sells to four different Chinese mills uses what it calls a mutual fairness clause to settle prices. He said that we have got agreements which are based on a benchmark, but then if the spot price varies above or below the benchmark by a certain point amount we would average so we'll get half of the upside, but also share half the downside."

Mr Russell Clark MD of Grange said meanwhile, Grange Resources in which Jiangsu Shagang Group China's largest non government steelmaker has a shareholding, prices its iron pellets according to the price agreed by Vale and Japanese mills at the Brazilian port of Tubarao.

He said that "I personally find the benchmark annual setting too long. The benchmark being set every three months? Perhaps that's what happens which I think will be a nice halfway point. It's liquid but it's controlled. We have talked in loose terms about the Rio deal in so far as 'it is a shame."

(Sourced from Reuters)