October 13, 2008

ICC urges for priority to steelmakers for iron ore supply

It is reported that Indian Chamber of Commerce has urged the union government to direct public sector mining companies to give priority for supplying iron ore to the domestic steel industry under long term contracts and at a reasonable price.

Mr Vishambhar Saran VP of ICC said that “We are not asking for a regulator in pricing of iron ore by the public sector mining companies. But, we want the government to benchmark ore prices in the long term interest of steelmakers.”

He also sought a government direction to state run miners that they should provide iron ore to steelmakers based on long term contracts, wherein pricing could be linked to the cost of mining and ensuring a reasonable return on investment. He said “Such pricing may be subjected to cost escalation annually.”

Demanding that exports of iron ore with ferrous content above 62% be banned immediately, the ICC has suggested an export tax of 25% ad valorem be applied for exports of iron ore in the interim.