Brazilian mining company Vale SA(VALE) saw a first-half 2009 revenue loss of $1 billion from iron ore contract discounts, Jose Carlos Martins, director for ferrous minerals and metals, told a press conference Thursday.

Since the beginning of the year, Vale has been granting many steel mills a 20% provisional discount on ore term contracts until a reference price has been agreed on.

Many steel mills have already accepted a 28% discount on Vale's 2008 reference price.

However, Chinese mills haven't yet settled a 2009 benchmark price and are believed to be holding out for a discount of around 40% of the 2008 contract price.

-By John Kolodziejski, Dow Jones Newswires; 55-21-2586-6086; John.Kolodziejski@dowjones.com