As was confirmed by the Managing Director of Atlas Iron on Wednesday, the company, which is the fourth largest iron ore manufacturer in Australia, will be pricing iron ore based on a combination of spot and benchmark term prices starting from next month.

As was confirmed by Atlas chief Executive David Flanagan in a recent interview, the new mechanism is aimed at weeding out the uncertainties which currently surround the fixed iron ore prices and wild swings in the spot market, which now accounts for about 50% of the global seaborne trade in the raw material, and has managed to foster much discord in the industry.

Nearly 70% of the iron ore which is mined from Atlas's Pardoo deposit, and sold off to the Chinese steel companies, will now be priced based in a "mutual fairness" basis, wherein buyers will be paying the mid-point between the yearly contract and the spot price, as has been confirmed by Mr. Flanagan.

The system would be applicable only if the spot price is 20% above the benchmark, he said.