core sector communique

Pricing Mechanism of NMDC

The Minister of Steel, Shri Beni Prasad Verma has said that Iron ore is in deregulated sector. Prices of iron ore are fixed by the individual companies based on commercial prudence and general market situation. NMDC Limited is one of the many iron ore producers in the country and its share in the country’s total production of iron ore is about 16% only. Besides NMDC Limited, there are many other public and private sector iron ore mining companies, which supply iron ore to the iron and steel industry in the country. As per the pricing policy being followed by NMDC Limited since the year 2011-12, the prices of various products of the mines of NMDC Limited in Chhattisgarh are kept in sync with the prevailing domestic iron ore prices. However, iron ore from the mines in the State of Karnataka is presently being sold through e-auction conducted by the Monitoring Committee as per orders of the Supreme Court. In a written reply in the Lok Sabha today Shri Verma said, some representations have been received in the Ministry of Steel regarding pricing mechanism of NMDC Limited. Being a Navratna Public Sector Enterprise, the commercial and financial decisions of the company are taken by the Board of Directors of NMDC Limited. The issue of pricing of iron ore is decided by the Board of NMDC Limited based on various factors including prevailing general market conditions. The Government generally does not interfere in commercial decisions of the company. However, to improve availability of iron ore to domestic iron and steel industry at affordable price, the Government has increased the export duty on iron ore from 20% ad valorem to 30% ad valorem on all grades of iron ore (except pellets) with effect from 30.12.2011.