NMDC not to renew ore export contracts

“NMDC officials said that the issue of renewing the Long Term Agreement with their overseas buyers be taken up after the situation of iron ore supply in Karnataka is normalised,” steel ministry sources told The Indian Express. The overall exports from NMDC’s mines have been minimal in 2011-12.

The apex court in its recent judgment had ordered that the quantum of ore to be mined from NMDC’s Karnataka mines through e-auction to be monitored by a Monitoring Committee. While 80 per cent of the proceeds would accrue to NMDC,the remaining 20 per cent would be set aside for compensating environmental degradation by mining activity.

To meet the production needs of another steel ministry PSU,Kudremukh Iron Ore Company Limited,is considering to supply ore from its Bailadila mines in Chhattisgarh.

According to sources,the NMDC management said that if exports were to continue uninterrupted,with supplies being provided by the Bailadila mines,then local buyers would complain as supplies to them would be governed by the Monitoring Committee that is restrictive.

The Union Cabinet had approved exports to the two nations at the request of the commerce ministry,which had cited long-term commercial relations with India. NMDC is opposed to exports as realisations are lesser than domestic sales.

In view of the fluctuating prices of iron ore globally,NMDC has decided to lower its premium to 10 per cent against 15 per cent in the third quarter of this fiscal in respect of its iron ore lumps.