October 12, 2008

NMDC hikes domestic iron ore prices

PTI reported that National Mineral Development Corporation has raised long term contract prices of iron ore fines by 47.5%, bringing the price to INR 1,783 per tonne retrospectively from October 2007.

Mr Kumar Raghavan executive director corporate communications of NMDC told PTI that "We have raised prices as per the terms of long term agreements entered with various steel companies. The new prices would come into effect retrospectively from October 1st 2007.."

Mr Raghavan said that “Currently we are selling ore at INR 1,209 per tonne which will increase to INR 1,783 a tonne. But these rates are still below the market rates. There is still a huge gap between local and international prices. We will review prices next year once they are agreed upon globally.”

He however added that "We are a bit concerned that naxalite problem could affect the movement of rakes, so we are a bit unsure as to what would be the exact quantum of supply to our existing clientele.

He informed that NMDC had sold about 27 million tonnes of iron ore in the domestic market last year and intends to sell 2 million tonnes more this year.

NMDC earned a net profit of INR 2,300 crore in 2006 and is targeting INR 3,005 crore this year. It has paid 100% interim dividend amounting to over INR 130 crore to the government.