State-owned National Minerals Development Corporation (NMDC), India's largest producer and exporter of iron ore, has followed global mining giants in switching to quarterly contracts and signed contracts with Japanese and South Korean steel mills to supply iron ore at nearly double the price.
Last week, officials from NMDC led by its CMD Rana Som met executives from Japan's largest steel maker Nippon Steel and South Korea's Posco to negotiate a doubling of price of iron ore, compared to last year's rates.
Talking to reporters on the sidelines of a conference in New Delhi organised to highlight the achievements of the steel ministry during the first year of the UPA government, Rana Som, said, ''We have concluded a pact with South Korean and Japanese steel mills for supplying iron ore in the present quarter. We have got a 94-99 per cent increase in rates over the previous contracted prices.''
Asia's third-largest iron ore miner, NMDC, which exports 15 per cent of its output or around 3 million tons of iron ore out of the 24 million tons it produces, will sell its ore at $139 a tonne free-on-board for iron ore lumps and $123 a tonne FoB for iron ore fines.
Last year, NMDC had finalised iron ore supply contracts with its overseas customers at $71 a tonne for iron ore lumps and $61 a tonne for iron fines.
Som said that the price is only for the April-June quarter only and NMDC will negotiate once again for the coming quarter depending on the prices prevailing on the spot market at the time.