Brazilian mining giant Vale has agreed to reduce its iron ore and pellet prices under a 2009 contract with ArcelorMittal.

The iron ore price for fines has been reduced by 28.2% and for lumps by 44.7%, compared to benchmarks in 2008, Vale said.

The new prices per dry metric ton Fe unit are $0.9651 for Southern and Southeastern System fines and $1.1384 for blast furnace pellets.

Vale has offered similar cuts in 2009 benchmark iron ore prices to Japanese and South Korean steelmakers.