Anglo-Australian miner Rio Tinto PLC (RTP) said Monday it had settled 2009 iron ore contracts with South Korean and Taiwanese steelmakers, reinforcing a benchmark price for the industry despite demands for steeper cuts from China.

"Each year the pricing negotiations are tough and this year is no exception, although the situation is becoming clearer as more customers settle to the same terms," Sam Walsh, Rio Tinto's chief executive for iron ore, said in a statement.

Rio, the world's second-biggest producer of seaborne iron ore, Monday said it finalized deals with South Korea's POSCO (005490.SE), and Taiwanese steelmakers China Steel Corp. (2002.TW) and Dragon Steel Corp. to cut 2009-10 iron ore prices by 33%-44%. Rio Tinto last week said it reached the same terms with Japan's Nippon Steel Corp. (5401.TO).

Iron ore contracts are now settled with most Asian customers, Rio said.

"We continue to negotiate with our remaining customers, the bulk of whom are in China," Walsh said.

The China Iron & Steel Association, an industry group, said Sunday it won't follow the price cut reached between Rio Tinto and Nippon Steel because it "will result in overall losses among China's steelmakers." But analysts say at least some Chinese steelmakers are likely to strike an agreement in line with their Asian counterparts.

"We think it most likely that China's steel mills will follow the contract benchmark settlements agreed between Rio Tinto, the (Japanese steelmakers) and Posco, although perhaps only following further drawn out negotiations," Citigroup analyst Alan Heap said in a research note.

Liberum Capital said some Chinese mills are unlikely to see any further discount in prices.

"We believe that higher quality steel producers that need high grade Australian and Brazilian ore such as Baosteel perhaps will come to the table, whereas others will be happy to take their chances on unsecured and open spot tonnage," Liberum analysts said, referring to Baoshan Iron & Steel Co. (600019.SH).

Contracts lock in prices for a year, while spot market prices can move to the advantage of either miners or steelmakers depending on short-term supply and demand.

"We believe the settlements achieved to date demonstrate that customers appreciate the certainty of price and volume that the benchmark system ensures," Walsh said.

Rio Tinto said it has agreed on a price of 97 U.S. cents a dry metric ton for Pilbara and Yandicoogina iron-ore fines, a type of low-grade ore, compared with $1.446 last year, and $1.12 a ton for high-grade lump iron ore, down from $2.0169.

Rio said it has sold about half the iron ore it has produced this year on the spot market.

Brazil's Companhia Vale do Rio Doce (VALE) and Anglo-Australian BHP Billiton Ltd. (BHP) are the world's biggest and third-biggest producers of seaborne iron ore, respectively.

At 1348 GMT, Rio shares were up 173 pence, or 6.2%, at 2973 pence, in a broadly stronger mining sector. The FTSE350 mining index was up 5.9%.

Company Web site: www.riotinto.com

-By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; jeffrey.sparshott@dowjones.com