NMDC takes KPMGs help to get iron ore pricing right

Written by fe Bureau | New Delhi | Updated: Dec 22 2012, 06:56am hrs
The government-owned mining major NMDC has appointed international consultant KPMG to work out a new pricing mechanism for iron ore.

"NMDC board has brought in an international consultant to look at the pricing issue. Their report is expected in January. The board will give due consideration to the report and adopt a formula after talking to all stakeholders, EK Bharat Bhushan, additional secretary and financial advisor in the steel ministry told FE.

At present, the country's largest iron ore producer does not have a fixed formula. The prices are usually decided on the basis of international trend and domestic demand, which has been opposed by many steel and sponge iron units who feel the domestic prices are far higher than the international prices.

The Comptroller Auditor General (CAG) of India had come out with its report on Thursday pointing out that the public sector iron ore miner has incurred losses of over R1,500 crore during 2007-10 for selling ore at less than market price.

Bhushan said, the steel ministry has already given detailed response to the CAG.

Some of our responses have been accepted in the CAG report, while they (CAG) have highlighted some, he said.

NMDC has also entered into a memorandum of understanding with Indian Railways for doubling the 150 km rail line from Kirandul to Jagadalpur in Chhattisgarh. The doubling work will facilitate more transportation of goods like iron ore which will create additional capacity and benefit the area, Beni Prasad Verma, steel minister said.