India in 5-year iron ore export deal with Japan

NEW DELHI: India, world’s third-largest iron ore exporter, has signed new five-year agreements with Japan and South Korea for ore exports, slashing the quantity to a maximum of 6.78m tonnes (mt) annually during ‘06-11.

“The new long term agreements with Japan and Korea have been signed. Iron ore exports to these two countries during ‘06-11 would be in the range of 2.7mt to 6.8mt,” said Christy Fernandez, additional secretary, ministry of commerce.

The previous five-year agreement ended on March 31. The agreement for ’01-06 had set the range at 9.6-16.5 mt of ore exports per year, but included exports to China as well by state-run National Mineral Development Corporation (NMDC). The new agreement provides for iron ore exports by NMDC to Japan and Korea only and ore exports to China would hereafter be carried out by trading firm Mmtc, for which a separate agreement would be negotiated in Beijing next month.

The decision for the two new five-year pacts was taken in view of the rising demand of iron ore within the country. The steel ministry and domestic steel companies have been seeking a curb on ore exports to meet local demands.

Mr Fernandez said while actual quantities to be exported would be negotiated every year, the range would not be revised till the end of march ‘11, when the contracts expire. For this financial year, the quantity of exports has been fixed at 3.5 m tonnes, a reduction of about 50% over that of last year.