NMDC for best deal with Japanese and Korean steel mills

NEW DELHI: Unfazed by the global economic meltdown, country's largest iron ore miner NMDC Ltd plans to go for the "best bargain" from foreign steel mills to supply raw materials under long-term contract.

"We will be asking the best price for our iron ore from Japanese and South Korean steel mills," NMDC Chairman and Managing Director Rana Som said.

An Indian delegation is likely to leave for a week from November 1 to negotiate the prices with international steel firms, he added.

Of its 30 million tons of annual iron ore production, the Navratna PSU exports nearly 3.5 million tons.

Asked if the companies, including Posco, would pay higher prices amid the economic slowdown, Som said: "We hope to get the best bargain despite the volatile market."

NMDC's higher price settlement with foreign companies may have a cascading effect on steel producers like Essar, JSW, RINL and Ispat, as domestic prices of iron ore supplied by the PSU are determined by percentage increase accepted by Japanese and Korean steel mills duly adjusted to rupee-dollar parity.

The PSU's price negotiation with Japanese and Korean steel producers has been in limbo for last couple of months due to Commerce Ministry's reservation on NMDC's plan seeking up to 97 per cent hike in iron ore prices.

The Ministry is of the view that NMDC should go for a moderate price revision taking into account India's long-term bilateral trade relationship with the two countries.