Iron ore major National Mineral Development Corporation (NMDC) has reduced the price of iron ore lumps by 5.9% or R320 a tonne for the current month, but has kept the price of fines unchanged at R2,610 per tonne. This is mainly to align rates with the landed cost of the imported raw material, a source from NMDC said. Following the reduction in prices, average lump price, having 65% iron ore content, stand at R5,060 per tonne for this month. This was decided by NMDC in a board meeting held in New Delhi.
However, NMDC decided to keep the price of fines, which have less iron content, unchanged at R2,610 per tonne. ?Iron ore fines prices have been kept unchanged for the month of January, but lump prices have been cut by 5.9% or R320 per tonne,? a source said. ?The price correction for iron ore lumps was needed since the landed cost of imported material is cheaper vis-a-vis the current price offered by NMDC,? the official pointed out.
However, NMDC?s move to reduce lump ore price may not act as a catalyst for domestic steelmakers to effect a price cut at a time when demand is going north. The PSU had raised the price of iron ore by 8-13% for the July-September quarter when international prices were low.
From this quarter, NMDC decided to revise prices of iron ore on a monthly basis. In October, it had reduced prices by 2-11% and again by 3-11%in November. However, it did not change prices in December to pacify steelmakers that accused the state-owned firm of selling at a higher cost domestically and exporting cheaper.
NMDC had earlier said that despite its willingness to explore iron ore free of cost in various states, many state governments are yet to respond to at a time when the mineral industry is facing negative growth. In a recent meeting, NK Nanda, director (technical), had said that as much as 25 billion tonne of iron ore resources have been identified in the country that are yet to be explored completely.
NMDC had entered into an MoU with Andhra Pradesh Mineral Development Corporation for exploration work. However, this too is yet to begin.
Iron ore production in 2012-13 was pegged at around 140 million tonne, which is just enough for the overall domestic requirement discounting any exports. ?The production of iron ore in India used be 240-250 million tonne two years ago.
But in 2011-12, it has come down to 170-180 million tonne. That?s nearly 100 million tonne less, because some mines have been closed,? an analyst said.
India imported about 9 million tonne of iron ore from April to November and this amount could go up to 15 million tonne in the fiscal year ending March, according to the Federation of Indian Mineral Industries.
