Press Trust of India reported that strong differences have emerged between state run miner NMDC and trading major MMTC over long term supply pact of iron ore to Japanese mills, with the former opposing the idea fearing lower realizations and the latter pitching for it.

The report cited a steel ministry official as saying that “Strong differences have surfaced between NMDC and MMTC over renewal of LTA with Japanese mills. While NMDC is opposed to it in the wake of high freight charges and possible duty hike, MMTC which gets 2.8% commission for supply, is pitching for it.”

MMTC, citing long standing relation between India and Japan, in a letter to steel ministry has argued for renewal of LTA and said that a new benchmark pricing mechanism was followed by it on the pattern of suppliers from Australia and Brazil.

The long term agreement of NMDC with Japanese steel mills for supply of iron ore, canalized through MMTC, ends on March 31st 2011.

NMDC exports 3 million tonnes per annum to 4 million tonnes per annum of ore to Japanese mills under LTAs.

(Sourced from PTI)