Fortescue Metals Group Ltd. (FMG.AU) said Monday it has struck prices for iron ore to be sold to China below a benchmark set by Rio Tinto Ltd. (RTP) with Japanese, Korean and Taiwanese steelmakers.

The pricing deal is subject to Fortescue completing a funding deal with Chinese financiers for between US$5.5 billion and US$6 billion by Sep. 30.

The Perth-based miner said it has struck an agreement with Baosteel Group Corp. and the China Iron and Steel Association, or CISA, to sell iron ore fines at a price of 94 U.S. cents per dry metric ton unit for the period of July 1 to Dec. 30.

This is about 3% below the price of 97 cents a dry metric ton unit that Rio Tinto has agreed with Japanese steel makers, a price which CISA has been resisting despite spot prices moving well above it.

Fortescue Chief Executive Andrew Forrest said the deal breaks the market impasse that had enveloped the Chinese iron ore industry and created uncertainty and risk.

"It also creates a realistic and agreed iron ore price that delivers value for all parties and provides strong support for Fortescue's continued growth," he said.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com
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