July 24th (Business Standard) – Country’s largest iron ore producer NMDC is seeking up to 97 per cent increase in iron ore prices from foreign steel makers, a move that could have similar repercussions on the domestic market, which may result in higher steel prices.

Other than sponge iron makers, steel players like Essar, Ispat and RINL have long-term contracts with NMDC for iron ore supply.     


Ahead of an Indian delegation’s visit to Japan and Korea to settle long-term contract prices with the steel mills there, NMDC has informed Steel Ministry, seeking nearly 80 per cent increase in prices of iron ore fines and over 96 per cent on lumps from the international clients.     


This is significant for steel industry here, as domestic iron ore prices are determined on the basis of the percentage increase accepted by Japanese steel mills for NMDC’s products duly adjusted to rupee-dollar parity.     


“If iron ore prices shoot up by 100 per cent, it will substantially add to our input costs, which may ultimately have a reflection on steel prices,” an industry official said.     


Of its total 30 million tonnes annual production, NMDC exports around 3.5 million tonnes to Japanese steel mills and South Korea’s steel giant Posco under long-term contracts.     


In a letter to Steel Ministry, NMDC said its finalisation of prices between Japanese steel mills and Posco has been guided by global price settlement of iron ore every year.     


NMDC plans to go by the recent price-settlement by mining majors Rio Tinto and BHP Billiton with Chinese buyers.     


Rio Tinto and Bao Steel had on June 25 agreed for price increase of 79.88 per cent on iron ore fines and 96.5 per cent on lumps.


Subsequently, BHP Billition settled its prices at the same level with Chinese buyers on July 4.


May 30 (The Hindu Business Line) – With an eye to ensure iron ore security, Rashtriya Ispat Nigam Ltd on Friday mooted a proposal for merger with another state-run company National Mineral Development Corporation, saying it would be beneficial for both.

Mr P K Bishnoi, chairman-cum-managing director of RINL, the corporate entity of Vizag Steel, said “NMDC has iron ore and wants to foray into steel-making, while RINL does not have iron ore, but has expertise in steel-making. If the two come together it m ake greater sense.”

Asked whether RINL has approached the Steel Ministry seeking merger of the two state-owned entities, he said there was no formal discussion with the ministry on the proposal.

“We had informal talks both with the ministry as well as with NMDC. It is our concept and thought. Consolidation and merger is taking place all over the world,” he said.

Mr Bishnoi said RINL had pulled out of the proposed joint venture steel plant with NMDC and SAIL at Chhattisgarh, since NMDC said iron ore would be supplied to the new company at the market price. SAIL had also opted out of it, he said.

He said that if such a merger took place, RINL that is currently undergoing expansion could increase its capacity beyond 16 million tonnes, as planned.

NMDC, he said, had a proven reserve of more than a billion tonnes of iron ore and produced around 27 million tonnes annually.