Brazilian mining company Vale SA has signed independent ore contracts with Chinese steel mills for fixed freight charges to further expand its presence in the mainland, ahead of next year's benchmark iron ore pricing negotiations.

Some Chinese companies are believed to have signed three to four year price contracts with Vale for fixed freight charges which are 20 to 30 percent lower than normal rates, said an executive with a State-owned steelmaker.

Vale is also believed to be bringing forward a series of plans like output expansion, a new distribution center and the construction of 16 large ore carriers to reduce transportation costs between China and Brazil. The executive, however, refused to disclose any further details on grounds of confidentiality.