Vale and BHP Billiton have convinced Japanese steel mills to purchase iron ore based on a quarterly pricing system from April 1. Analysts said that the end of annual fixed-price contracts were costing miners billions of dollars in lost profits.

An ultimate move to quarterly pricing needs world's no. 2 maker Rio Tinto to also substitute annual prices, which it has said it expects to do this year.

James Wilson, resource analyst for DJ Camichael & Co. said, "The big one will be if Rio decides moving away to quarterly index pricing".

On Tuesday, the world's no. 3 iron ore producer, BHP Billiton, said that it had agreed with Asian consumers to move pricing for the majority of its iron ore to short-term contracts that would see sales based on market-cleared prices.

Vale has approved an uncertain quarterly iron ore price agreement with Asian steel companies, which would increase prices by 90%.

The swell by Vale puts the price of ore at $105 per ton for Japan's Nippon Steel and South Korea's Posco versus the present yardstick, which is due to expire on Wednesday, of about $62 a ton.

Garret Dixon, Managing Director of Gindalbie Metals, said, "That's good news for us because, like most iron ore producers, we are price takers and ride on the back of what the big boys' negotiate". Next year, it will mine 10 million tons of iron ore in Australia for sale to China's Ansteel.