BEIJING (Commodity Online): China's steel mills, which depend on iron ore imports from India and Australia, will face major problems in the coming days as India and Australia have hiked export duty on the commodity.

Last week, India raised the export tax on iron ore lump variety to 10 percent from 5 percent, and levied a 5 percent tax on iron ore fines.

Currently, the average price of Indian ore with 63.5 percent iron content quoted at around $80 per tonne. China's mills depends heavily on iron ore imports from India.

Indian iron ore exports more than doubled in October to 9.325 million tonnes from 4.26 million tonnes a year ago, largely due to a pick-up in Chinese demand, data from FIMI showed.

Following this development, Chinese steel mills have been told they can break rank by signing separate iron ore agreements with the world's top three miners as collective price talks drag on.

According to a report in the China Daily, this is the first time the China Iron and Steel Association has allowed its members to negotiate directly with iron ore miners before a nationwide benchmark price has been agreed.

According to the report, a number of unnamed firms have already signed deals. Early this month, CISA urged steelmakers to stop buying iron ore from Rio, BHP and Vale in protest at an alleged price monopoly after the miners said they had abandoned annual contracts in favour of a short-term pricing system.

China is the world's largest importer of iron ore and the industry group wants to maintain the long-term contract price system to avoid large price fluctuations.

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