Briefing reporters about the Cabinet decisions, information and broadcasting minister Priya Ranjan Dasmunsi said that all the existing LTAs entered by MMTC for supply of iron ore were coming to an end on March 31, 2006 necessitating the government action. The new LTAs will be for a period of five years, he added.
India supplies about 3 mt and 10 mt of iron ore annually to Korea and Japan respectively. Most of this supply is undertaken by MMTC, the sole canalising agency for export of high grade iron ore with 64% or higher iron ore content under LTAs with the respective countries.
In the case of China (largest importer of iron ore from India with imports over 50 mt annually), while most iron ore supplies are through spot market, a few large Chinese mills have also entered into LTAs with Indian suppliers.
The Cabinet also approved a lower annual ceiling of exports from Bailadila mines - 2.7 mt of lumps as against 3.0 mt earlier and 1.81 mt of fines as against 3.8 mt.
Proposal to allow MMTC to enter into fresh long-term pacts with Japanese, Korean & Chinese steel mills for exporting iron ore cleared
The Bailadila mines in Karnataka is considered the richest source of high grade ore globally with iron content of over 67%.
Most of the mining in this is currently done by National Mineral Development Corporation (NMDC).
FE had earlier reported that the steel ministry has moved a Cabinet note to reduce exports of high grade ore produced by NMDC.
The Cabinet committee on economic affairs (CCEA), which also met on Thursday, approved the expansion of Mahanadi Coalfields Lakhanpur opencast coal mining project in Orissa by 15 million tonne per annum. Tenders will be floated for outsourcing the job.