NMDC iron ore export pricing policy undecided as yet

July 30, 2008

July 30th (Steel Guru) – FE reported that the steel and commerce ministries are pitted against each other over National Mineral Development Corporation’s demand for upward revision of iron ore prices in its long term supply agreements with Japan Steel Mills and South Korea’s POSCO.

As per report, while the steel ministry has endorsed the state owned mining giant’s proposal to include rail freight and 15% export duty costs on top of a higher price for iron ore, the commerce ministry has opposed it saying India would risk jeopardizing its commercial relations with the 2 countries.

Mr RS Pandey steel secretary said that Australia and Brazil had already secured a much higher percentage hike compared with last year’s prices. Steel ministry is reported to have said that long term agreements were between business enterprises of the 2 countries not between the governments thus NMDC should take commercial decisions in its own interest.

On the other hand the commerce ministry observed that revenues from rail freight and export duty accrue to the government only and hence should not be built into the export price. It also asked the PSU not to insist on getting reimbursements in view of the larger public interest and Indo Japan relations.

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