NMDC may enter spot market for selling iron ore ‘It will allow us to take advantage of the recent rise in rates’

Print this page Posted on : 09-26-2007 by recycleinme.com

National Mineral Development Corporation Ltd (NMCD) is looking at entering the spot market for selling iron ore in the next couple of months.

Speaking to Business Line on the sidelines of a meeting here, Mr. B Ramesh Kumar, Chairman and Managing Director, NMCD Ltd, said: “It is a strategic move on the company’s part to have a presence in the spot market.

“It will allow us to take advantage of the recent hike in spot rates of iron ore.

“We are in the process of finalizing the modalities and the plan should be ready in the next one to one and a half month”.

In recent months global iron ore prices have increased close to 70 per cent because of the high demand from China.

NO PRESENCE YET

He, however, did not give the exact amount that the company is looking at selling through this route. NMDC until now used to sell most of its production through long term contracts and had no presence in the spot markets.

The company is looking at selling most of the ore in the domestic market itself. However, Mr. Kumar added that if the demand from the local consumers is weak then they might look at exports as well.

Last year, out of the 27 million tonnes (mt) that the company produced, around 2.5 lakh tonnes of low grade fines were sold in the spot market. NMDC is also looking at investing Rs.18,000 crore in the next 10-12 years in business expansion.

RAISING PRODUCTION

“A part of the investment will be used to augment our production and the rest would be utilized for setting up a sponge iron and pellet plants along with investment in other areas,” Mr. Kumar said.

The company plans to ramp up production from 27 mt last year to 50 mt by 2014-15.

This year, they expect to touch a production level of 31 mt by the end of the financial year.

Mr. Kumar was also upbeat on the iron ore market and said that it would continue the upward spiral for at least the next two years.

BAILADILA DEPOSITS

NMDC is also in the process of finalizing plans to approach the Delhi High Courton the allocation of Bailadila-I and Bailadia II deposits to Tata Steel and Essar Steel.

“We were applicants in Bailadila-I and had mining rights in Bailadila –III and were the rightful claimants. With the Steel Ministry giving us the clearance we are looking at approaching the High Court soon,” he added.

Mr. Kumar also said that NMDC has requested the Chhattisgarh Government to consider its request for granting mining rights of Bailadila IV deposit.

Source : Business Line