According to Eduard Potapov,- the Chief Executive of Metalloinvest, minutes of the deal are still under discussion and price of ore will be decided every month. Meanwhile, iron ore prices at Shanghai Metal Exchange were reported at their six month high of $170-$172 per ton.

The deal was signed during the fifth Russian-Chinese business forum, which was also attended by Chinese Prime Minister Wen Jiabao.

Economic cooperation between the two neighbors have picked up in recent times with China tapping in to the energy and mineral resources of Russia. Baosteel, which traditionally buys ore from BHP-Billiton, VALE and Rio Tinto, has added Metalloinvest as part of its strategy to diversify.

“The agreement signed today will be a beginning of a long-term and mutually beneficial cooperation”, Potapov said in a statement hoping more such deals will materialize in future.