(a) the criteria being followed by the National Mineral Development Corporation (NMDC)
at present regarding to the pricing of iron ore;
(b) whether NMDC has decided to review the pricing mechanism for domestic buyers every
quarterly of the year; and
(c) if so, its likely impact on the pricing of iron ore on the consumers?
THE MINISTER OF STATE IN THE MINISTRY OF STEEL(SHRI A. SAI PRATHAP)
(a) NMDC has been fixing its iron ore prices for domestic customers based on prices of
its iron ore exported to Japanese Steel Mills (JSMs) and POSCO, South Korea, which is settled
on the basis of international benchmark prices. However, the Free on Board (FOB) price fixed
for export is moderated to determine the pit head price charged from the long term domestic
customers.
(b) From the year 2010-11, the system of international benchmark pricing of iron ore has
changed from yearly pricing to quarterly pricing. In line with this, NMDC has also decided to
review its prices for domestic long term customers on a quarterly basis.
(c) Iron ore is a deregulated sector and the price of iron ore for consumers is governed
by market forces depending upon various factors including demand –supply situation and trend
of price in the international market, etc. It is also added that NMDC supplies only about
20-25% of the total consumption of iron ore in the country.