UPDATE 1-Vale says Arcelor agrees to iron ore price hike

(Updates with more details on prices, comments from spokesman, paragraphs 3-9)

RIO DE JANEIRO, March 6 (Reuters) - Brazil's miner Vale (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research) said on Thursday ArcelorMittal (ISPA.AS: Quote, Profile, Research) (MT.N: Quote, Profile, Research) joined its other big clients in accepting a 65 percent iron ore price increase and a premium for higher-quality Carajas ore.

Other key clients of the world's biggest iron ore producer and exporter in Asia and Europe already had agreed to pay between 65 and 71 percent more in the year beginning April 1.

Carajas ore will have a premium of $0.0619 per dry tonne Fe unit for Luxembourg-based Arcelor. That is the same premium Vale had sealed with its European customers, Germany's ThyssenKrupp (TKAG.DE: Quote, Profile, Research) and Italy's Ilva earlier, amounting to a hike of 66 percent.

"There are still some clients left, but the big ones have already agreed to the price increase," a Vale spokesman said.

The company said prices for 2008 reflect the continuity of excessive demand in the global iron ore market.

The 65 percent price increase is for iron ore fines from Vale's Southern System. Asian customers had agreed to pay 71 percent more for ore from Vale's massive Carajas mine in the Amazon jungle.

Even with the smaller increase, the European companies will pay slightly more for ore from Carajas -- $1.406 per dry metric ton Fe unit -- than the South Korean and Japanese steel mills, which will pay $1.2517 per dry tonne Fe unit.

Australian miners Rio Tinto (RIO.L: Quote, Profile, Research)(RIO.AX: Quote, Profile, Research) and BHP Billiton (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research) have yet to conclude a similar deal with their Asian customers.

Vale is in talks to buy Swiss rival Xstrata (XTA.L: Quote, Profile, Research), a deal some analysts say could surpass $90 billion, and the price rise will boost cash flow to help finance the potential takeover. Last year, iron ore prices rose 9.5 percent after a 19 percent hike in 2006 and a 71.5 percent jump in 2005. (Reporting by Andrei Khalip; Editing by David Gregorio)