Brazil's iron ore giant Companhia Vale do Rio Doce (CVRD) confirmed Thursday that it had reached an agreement with China's Baosteel Group on the price of iron ore in 2007.

According to the agreement with Baosteel, the largest steelmaker in China, the prices would increase by 9.5 percent to stand at 0.7320 U.S. dollars per metric ton unit from Carajas mining complex and 0.7211 dollars per unit from the Southern System Fines for the next year, respectively.

This was the first time that the CVRD, the world's biggest iron ore producer, has favored a Chinese company in settling the price, which consolidated China's involvement in the sector.

The CVRD also said in a press release that it was one of the fastest negotiations ever held on the price of iron ore, and that the prices agreed reflected global iron ore market conditions.

The iron ore price was raised by 19 percent following a long period of negotiations with Germany's ThyssenKrupp this year.

In 2005, the three iron ore giants -- BHP Billiton, Rio Tinto and CVRD -- increased the price by 71.5 percent.

The CVRD became the biggest iron ore supplier to China in 2006, with exports to the country amounting to 20.4 million tons. The company is expected to reach a 40-percent rise in sales to China by the end of the year.

Source: Xinhua