BHP says some 2009/10 iron ore talks still ongoing

SYDNEY, Sept 16 - BHP Billiton Ltd/Plc is still in talks over some current year benchmark iron ore contracts with Chinese steel firms, and will start next year's talks in October, its head of marketing said on Wednesday.

The global financial crisis, which had caused volatility across a range of commodities, had persuaded more of BHP's customers to move to short-term pricing arrangements, President, Marketing Tom Schutte added.

Iron ore talks between miners including BHP and Chinese customers have been particularly fraught this year as China's top negotiator held out for a deeper cut than that secured by other Asian mills, even as spot prices soared.

Spot iron ore prices to China peaked at $115 a tonne in August, but have since slid back to $82-$84 this week, still a premium of around 14 percent to the benchmark.

BHP has made no secret of its desire to drop the traditional benchmark system of selling iron ore at one price for a 12-month period, in favour of what it calls more transparent arrangements such as index pricing.