Rio Tinto joined China's iron ore trading platform. [File photo]
Rio Tinto Plc, the world's second-largest iron ore miner, joined China Beijing Metals Exchange, China's first spot iron ore trading platform, on Friday, a move that will help boost the country's clout in pricing the key material, analysts said.
"We welcome the development of CBMX as it gives us a new option for selling any available tons to China, over and above those already contracted," said Alan Smith, Rio Tinto's Iron Ore Asia president.
The agreement will require the producers to sell a pledged volume of their ore output through the platform.
The Beijing-headquartered exchange will bring steelmakers from China, the world's largest consumer of iron ore, and leading iron ore producers onto a common platform, after the top miners abandoned a 40-year annual benchmark pricing system in 2010, Reuters reported.
The announcement came just one day after Brazilian mining giant Vale SA signed a Memorandum of Understanding with CBMX.
Australia's Fortescue Metals Group Ltd, the third-largest iron ore miner, joined the platform on March 20.
The spot online trading platform will reflect the supply and demand conditions of the iron ore market "objectively and truthfully" and help foster a "fair, reasonable and transparent" global iron ore pricing mechanism, said a statement on CBMX's website.
Jointly launched on Jan 16 by China Beijing International Mining Exchange, China Iron & Steel Association and China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters, the electronic platform has already started trial operations, according to the statement.
It is expected to start formal operations in May.
BHP Billiton Ltd is the only top iron ore miner that has yet to join the CBMX. It had previously given strong support to GlobalORE, a similar trading platform in Singapore.
China's major steel companies - including Baosteel Group Corp, Hebei Iron & Steel Group Co Ltd, Wuhan Iron and Steel Group Corp, Shougang Group, Angang Steel Co and China National Minerals Co Ltd, a subsidiary of China Minerals Corp - have agreed to join the new platform.
China accounts for 60 percent of the global seaborne iron ore trade and has the world's largest iron ore spot market.