Shares of Iron Ore Holdings Ltd., fell as much as 21 percent to A$1.395 on the Australian stock exchange and traded at A$1.475 at 12:04 p.m. Sydney time.

This is after the mining firm owned and controlled by Australian billionaire Kerry Stokes failed to reach a sales agreement with Rio Tinto Group.

Iron Ore Holdings said today in a statement: "If the parties are unable to agree the terms of access by August 8, then the ore sales agreement will automatically terminate. The effect of termination of the ore sales agreement is that the relationship agreement will also terminate."

Rio Tinto, the world's second-biggest exporter of iron ore, was evaluating Iron Ore Holding's Iron Valley deposit in Western Australia's Pilbara region.

Iron Ore Holdings has 400 million metric tons of resources, it further stated. The company said Iron Valley is 10 kilometers (6.2 miles) from Rio's Yandicoogina mine.