It was stated by Baosteel that the company’s January prices reflected the prices gap of different products but iron ore and steel products’ price cycles are apparently different.

Baosteel said that up to now, the iron ore agreement prices are all annual, and the negotiation has lasted for half a year’s time, while China’s mainstream steelmakers including Baosteel their products prices are monthly based.

For iron ore, global market’s whole supply demand situation plays a crucial role in determining its prices and now the global steel enterprises’ profitability do not bolster iron ore price’ increasing next year.

It is unreasonable to link ore negotiation with Baosteel’s price adjustment. For long term, iron ore reserve is adequate and there is no shortage in supply, just the demand will appear periodical characteristics due to global economic condition change. At different period, iron ore prices will go up and down accordingly.

It is known that on December 10, Baosteel announced their products’ prices for next January and most of the products prices were increased by CNY 300 to CNY 600 per tonne. Afterwards, other steelmakers also lifted their prices. Market players questioned that whether Baosteel’s price up would affect the iron ore negotiation.

It was said from the China Metallurgical Geology Bureau over the weekend that exploration work in the eastern region of north China’s Hebei Province shows potential iron ore reserves in this area are estimated to top 10 billion tons.

A total of 3.44 billion tons of iron ore have been verified in five mines in the province, said Yan Xueyi, the bureau’s director.

The discovery of this deposit would largely ease the shortfall in China’s domestic iron ore supplies and contribute to a sound and sustainable development of the country’s steel industry, according to Yan.

China imported 443.56 million tons of iron ore in 2008, bringing the country’s reliance on imported iron ore to around 50 percent.

The country’s steel mills suffered an unfavorable position during the annual iron ore pricing talks as overseas miners allied to ask for a higher price.

It was reported from the local media that Guangdong Province-based Rixin Development, a privately-owned company, has reached an agreement to buy a majority ownership in a foreign iron ore mine.

Rixin Development inked a deal Saturday to acquire a 70 percent stake in an iron ore mine in Chile, the Guangzhou Daily newspaper reported Sunday. Financial details were not disclosed.

Rixin Development, which declined to release any information about its major businesses or registration, is listed on the local enterprise information website sdwin.com as a “trader for home appliances, textiles, auto parts and so on, and importer and exporter of various products and technologies.”No further information about the company could be found online.

The deal would promote the participation of the country’s qualified privately-owned companies in the overseas mining industry, and might lead to the restructuring of the iron ore importing market in two or three years, said Liu Weidong, general manager of Rixin’s iron ore marketing partner, the Zhuhai-based Guangdong branch of State-owned miner and mineral trader China Minmetals, as quoted by Guangzhou Daily.

Privately-owned companies are in a better position to invest in overseas natural resources, said Li Zihao, president of Rixin, as quoted in the report.

“A government background may trigger alertness when it come to State-owned enterprises buying foreign mines,” said a Beijing-based steel analyst who preferred not to be named. The Chinese government is spurring enterprises to purchase natural resources overseas, especially iron ore.

Chinese State-owned giant Chinalco’s $19.5 billion bid for Aussie iron ore giant Rio Tinto, one of the world’s largest iron ore miners, was disapproved in early April by Rio Tinto’s board.

Privately-owned enterprises are more flexible in dealing-making, said Wang Zhe, a steel analyst with Beijing-based CITICS Securities Research. Wang expects iron ore prices for 2010 to grow more than 10 percent over 2009, as China’s economy keeps recovering and steel production grows.

China produced 560 million tons of steel in the first 10 months of the year, up 15.4 percent from the same period last year, according to figures from the China Iron and Steel Association.

It is reported that Russia’s Emergency Situations Ministry says the death toll in an explosion at an iron-ore mine in the Ural Mountains has risen to nine.

The ministry said in a statement Thursday that the blast occurred because of a violation of safety rules in transporting explosives.

Initial reports said six people were killed and another three were missing after Wednesday’s blast at the Yestyuninskaya mine in the city of Nizhny Tagil.

The mine belongs to Evraz Group, one of Russia’s largest steel and mining companies. Evraz is London-listed and part-owned by billionaire Roman Abramovich.

Mine explosions and other industrial accidents are common in Russia and other former Soviet republics, and are often blamed on a failure to follow safety regulations.

It is said from a Chinese smelter source on Thursday that Chinese copper smelters are willing to accept the same treatment and refining charges for 2010 that Freeport-McMoRan Copper & Gold Inc agreed with Japanese smelters.

A Japanese smelter source confirmed the deal with Freeport at 38 percent below 2009 levels, but added that talks were still ongoing with BHP Billiton, which he said was demanding even lower fees for smelting concentrate.

An official at Pan Pacific, one of Japan’s leading copper smelters, confirmed that a deal had been signed with Freeport, although declined to give any further details.

Freeport-McMoRan has agreed 2010 fees to convert copper concentrate into finished metal of $46.50 a tonne and 4.65 cents a pound with Japanese smelters, a 38 percent cut from this year’s fees.

“We consider this a benchmark and will try to see that the same fee is applied to all other TC/RCs for 2010,” the Japanese smelter source said.

Chinese smelters had sought to settle the treatment and refining charges at $60 a tonne to convert concentrate into copper anode and 6 cents a pound to refine anode into cathode, but an excess of smelter capacity versus concentrates has left the industry accepting lower fees to secure feedstock.

“We have to accept it, based on the market conditions,” said the Chinese smelter source, who declined to be identified as he was not authorised to speak to the media.

Treatment and refining charges are fees paid by miner to smelters to convert imported concentrates into refined copper, and are deducted from the sale prices, based on London Metal Exchange copper prices.

It was said from Jiangxi Copper chief negotiator on Thursday that China’s Jiangxi Copper Co. is still in talks with BHP Billiton Ltd. and Freeport McMoran Copper & Gold Inc.  on annual fees for 2010 to smelter the raw material into refined metal.

“This is a big decision… we’ll have to think about it carefully,” the official, who didn’t want to be named, said, after Tongling Nonferrous Metals Group’s chief negotiator said the company has settled 2010 copper TC/RCs with Freeport at $46.50 a metric ton and 4.65 cents a pound, down 38% from this year.

The fees, also known as treatment and refining charges or TC/RCs, represent the profit margin of copper smelters.

In times of tight concentrate supply, smelters are forced to lower these charges to ensure sufficient raw material availability to keep smelters running.

It is said from the chief negotiator for Tongling Nonferrous Metals Group Wednesday that Chinese copper smelters will agree to a settlement price on 2010 copper treatment and refining charges with U.S.-based Freeport McMoRan Copper & Gold Inc. (FCX) at $46.50 a metric ton and 4.65 cents a pound.

“China will accept the TC/RCs that were settled between Japanese smelters and Freeport,” said Yang Jun, who also leads the China Smelters Purchase Team.

He said that so far, the deal is with Freeport.

The settlement is roughly midway between $50/ton and 5 cents/lb that the smelters had sought and $43/ton and 4.3 cents/lb that miners wanted.

It is said from Chen Yanhai, who is the director general of the Department of Raw Material Industry under the Ministry of Industry and Information Technology (MIIT), recently that MIIT will cooperate with relevant departments to strengthen the protection of resources and establish a rare metal reserve system in 2010.

China’s reserves of rare metals including tungsten, indium and rare earth all rank first in the world, and the output of the metals accounts for over 80 percent of the world’s total output, and deposits of rare metals such as molybdenum and germanium also rank among the most extensive in the world. However, cutthroat competition and price wars are severely wasting China’s rare metal resources.

Chen said that China should promote the integration of the rare metal industry and form an industrial pattern led by large-scale enterprise groups, and China should also organize relevant departments and associations to research and propose rare metal management methods and perfect the long-acting rare metal management mechanism.

Meanwhile, MIIT will also cooperate with relevant departments to strengthen resource protection and establish a rare metal reserve system. The MIIT will strengthen its guidance and supervision on the rare metal management work of every place in China, and help establish province-level and lower rare metal coordination mechanisms.