Rio Tinto Ltd. has completed the first round of iron ore price talks with Japanese and Korean steel mills and the Anglo-Australian miner is demanding a 40% increase in 2010 benchmark prices, the 21st Century Business Herald reported Wednesday.

"When this year's iron ore price talks started, Japanese and Korean steel mills agreed to a higher benchmark price for this year, so the key issue now becomes how much the price hike will be," the report said, citing a mining source close to Rio Tinto and BHP Billiton Ltd.

Rio Tinto officials couldn't immediately be reached for comment.

Chinese mills led by Baosteel Group Corp. are also holding price talks with the three global miners, the report quoted a purchasing manager at a state-owned iron ore trading house as saying.

"Baosteel has in principal agreed to the price hike, (and) they're under much pressure in this year's talk," said the person.

Chinese steel mills, however, are unlikely to accept an increase of more than 30% from 2009 levels, the report quoted a person close to the negotiating parties as saying. "The (price hike) may be around 20% to 30% for this year," he said.

According to an Australian mining source cited in the report, Japanese and Korean steel mills may be willing to accept a 40% hike this year although they haven't formally accepted the offer.

The report quoted Shan Shanghua, chairman of the China Iron and Steel Association, as saying he had no knowledge of the development.

When contacted separately by Dow Jones Newswires, CISA Deputy Secretary General Qi Xiangdong also said he was unaware of any progress in talks.