The Hindu Business Line : NMDC to push for better ore price

Hyderabad, July 10 National Mineral Development Corporation (NMDC) will push for a better price for its iron ore with Japanese steel mills and South Korean steelmaker Posco during negotiations scheduled for the end of the month.

“Though the dates have not yet been finalised, officials have said that the meeting could be either on July 26 or 28 with Japanese steelmakers followed by meeting with officials of Posco,” Mr Rana Som, Chairman and Managing Director, NMDC, told Business Line here on Thursday.

He said this time the negotiations are going to be totally different. On previous occasions there were no talks, but a standard increase as applicable to everybody was effected. “This time since the price of the ore is being decided depending on the country of origin and because our ore is of very good quality we are hopeful of getting a good deal,” he said.

Of a total production of 30 million tonnes (mt) of iron ore from its Bailadila mines in Chhattisgarh and Donimalai in Karnataka, the corporation exports around 3 mt to Japanese mills and 4,00,000 tonnes to Posco.

Australian mining majors Rio Tinto and BHP Billiton, a couple of months ago, got a record increase of 96.5 per cent for lumps and 79.88 per cent for fines from Asian steel companies. The deal overshadowed the earlier one struck between Brazilian miner Cia Vale do Rio Doce and Chinese steel producers for a 65-71 per cent increase.

Mr Som, however, did not want to comment on the exact quantity of hike that they would be demanding. “We expect the increase to be similar to what the Australian companies have got because of the good quality of ore that we mine,” he said.

According to him, the negotiations would also be a benchmark for determining the price rise for iron ore that is supplied to the domestic steel companies such as Essar Steel, Rashtriya Ispat Nigam Ltd and Ispat Industries.

“It is too early as of now to comment on the percentage of rise. But whatever the increase it will be adjusted against the October price hike,” Mr Som said.

The company sells high grade (ore with iron content above 64 per cent) fines at Rs 1,783 a tonne and lumps at Rs 2,500. In comparison, the price private miners demand is determined by the price prevailing in the spot market, which is at Rs 4,500-6,000 a tonne.

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