BHP Billiton has matched Rio Tinto’s near 100 per cent price hike for 2008-2009 iron ore deliveries, Chinese industry officials said on Friday, ending protracted talks over contracts worth billions of dollars.

The officials confirmed an unsourced report in the Australian Financial Review that BHP Billiton, the last hold-out in bitter-fought talks, had secured terms in line with takeover target Rio’s 96.5 per cent increase for iron ore lumps and a 79.88 increase for fines, won from Baosteel two weeks ago.

”For the industry from mills to iron ore producers, everyone wins,” Judy Zhu, commodity analyst at Standard Chartered Bank, said.

”Iron ore producers will make more money and the steel makers, although they are paying more for their raw materials, will be able to pass these higher costs to their customers. It will be downstream users who will have to bear higher prices.”

BHP spokeswoman Samantha Evans in an emailed statement called the report ”pre-emptive”.

Li Xinchuang, vice president of the China Metallurgical Industry Planning & Research Institute, told Reuters the report was correct but declined further comment. A second source who declined to be named also confirmed the deal.

BHP had initially held out for an even greater rise, arguing that soaring freight rates made Australian ore much cheaper relative to longer-distance Brazilian grades. Brazil’s Vale agreed to a 65-71 per cent rise in February.

BHP is fighting to win a $170 billion unsolicited bid to buy Rio, in part to combine both companies’ iron ore mines in Australia.

The benchmark price each year is closely watched because it also determines what smaller iron ore miners and steel mills worldwide can expect to pay during the 12 month shipping year ending every March 31.

”We are not yet aware of any BHP settlement,” a spokesman for Fortescue Metals Group Ltd, a smaller Australian iron ore miner, said.

As talks between BHP and its customers dragged on beyond an informal June 30 deadline, Fortescue, which is in its first year of operation near BHP and Rio mines in west Australia, has been forced to rely solely on Rio for price guidance.

The rare divergence in Australian and Brazilian deals comes at a time when BHP is also pushing to price more of its iron ore on the basis of spot market prices, irking customers such as Baosteel of China, Nippon Steel Corp and South Korea’s POSCO, which are already fuming over its plans to buy Rio and create a super mining house with even more sway over resource supplies.

”Nobody can tell right now exactly how things will be next year. This year it’s a new story for everything,” said Li.

Rio Tinto said on Tuesday that all of its Asian customers had now agreed to an up to 96.5 per cent price hike for ore delivered between April 1, 2008 and March 31, 2009.

News of the agreement comes just a day after BHP won partial US antitrust clearance for its Rio bid and the same day that the European Commission is expected to announce an in-depth investigation that could last beyond year end.