NMDC Increases Prices Of Iron Ore after Closure of Odisha Mines

Author: Paul Ploumis 05 Jun 2014 Last updated at 07:13:51 GMT

NEW DELHI (Scrap Monster): NMDC Ltd, India’s largest iron ore producer has increased prices of ore by 9 percent in June, due to the declined supply because of the temporary ban on some mines in Odisha. The hike in iron ore price will add problems to the steel makers such as JSW steel Ltd, which has been forces to buy low quality iron ore from Goa in order to cope up with the declined supply of the high grade iron ore from Odisha.

Supreme Court issued an order to close the about half of the 56 mines in Odisha due to its non renewal leases. The closed mines contribute about half of the state’s outturn of more than 70 million tonnes per annum. According to its mines director, Deepak Kumar Mohanty, the state has since renewed the leases of eight mines and expects outturn in the year 2014-15 to hold around previous year’s level despite the short term hit.

As per the expected rise in demand for the iron ore from NMDC, the company has increase the prices of iron ore fines by 9 percent to Rs 3,160 per tonne and for iron ore lumps by 7 percent to Rs 4,600. India was once the largest exporter of iron ore in the world, exporting a record of 117 million tonnes in the fiscal year through March 2010. But it slipped to 10th position in the last fiscal year with estimated exports of less than 20 million tonnes because of the restriction taken to curb illegal mining across various states.