Mumbai: Rio Tinto, the world's second-largest iron ore producer, has sought a higher price for its benchmark iron ore than the one negotiated by Brazilian mining conglomerate Companhia Vale do Rio Doce (Vale) with Nippon Steel of Japan and Posco of South Korea.

Rio Tinto, which said it plans to replicate a 71 per cent increase effected by Brazil's Vale in the first annual round of iron ore contracts, has asked Chinese importers to pay an additional freight premium to reflect the lower cost of shipping ore to Asia from Australia.

Rio Tinto's demand to raise prices of some iron ores by nearly 100 per cent has put pressure on Chinese steel makers, which are major customers for Australian ore. This has driven some Chinese steelmakers to seek long-term contract with Indian exporters.

Chinese importers are still holding out against demands by Rio Tinto, the subject of a £70 billion hostile bid by one of the world's other three iron ore giants, BHP Billiton.

This also confirmed Chinese fears that BHP's bid for Rio is designed to increase its pricing power.

Major Chinese steelmakers, including state-controlled Baosteel, are understood to have resisted Rio's initial demands for a package that would see some iron ore prices rise by more than 100 per cent.

Rio Tinto's move may also signal the beginning of the end for the benchmark system of iron ore pricing.

Under the benchmarking system, iron ore prices have typically followed benchmarks set by one of the three major ore producers - Vale, Rio Tinto and BHP Billiton - in their annual negotiations with major consumers.

These three companies account for almost three-quarters of global iron ore output.

Japanese steelmakers are also reported to be organising a similar response to such price hikes.