BHP BILLITON said yesterday that it would accept the same rise in the benchmark price of iron ore as agreed by Rio Tinto and its customers, ending months of protracted negotiations.

The BHP settlement - struck with China's leading steelmaker, Baosteel - means both Australian miners will receive a 79.88 per cent increase in the price of iron ore fines and a 97 per cent increase in the price of lump ore. Other Australian iron ore miners, such as Fortescue Metals, will accept the same price.

"There is no surprise that BHP would accept the same prices Rio has settled as BHP is the smallest among the three major exporters to China," Luo Wei, an analyst in Shanghai with China International Capital, told Bloomberg.

BHP's president of marketing, Tom Schutte, said his company now expected to settle the remainder of its benchmark price-linked contracts with customers at the same price.

BHP aims over the longer term to dismantle the benchmark system and replace it with an indexed price that would provide more parity with the spot market. It is no longer signing new contracts based on the benchmark price and is supporting a screen-based trading system similar to that used for energy coal.

For the first time this year, Australian miners settled for a different price than the world's largest iron ore miner, Vale of Brazil. BHP and Rio argued they deserved a higher price than Vale due to the lower cost of shipping ore from Australia to Asia than from Brazil.