The National Mineral Development Corporation (NMDC) may review the long term contract prices of iron ore if the spot rates decline by more than 25% from the rate at which the long term contract was signed.
The PSU is also open to the idea of having mid term price review in the case of long term contracts, said Rana Som, chairman and managing director of NMDC Ltd.
In early October, it may be recalled, NMDC had increased contract prices of iron ore by as much as 40%, when the steel prices were moving southwards.
Speaking at a seminar here on Tuesday, he said, traditionally, iron ore is being traded against long term arrangements as the quantity and quality of offtake and supply of the commodity is assured and the price is also immune to the market conditions to a certain extent. ?In general, we are open to the suggestion of having a mid term price review in case of long term contracts as it will benefit the industry on the whole. But as far as the current iron ore pricing is concerned, I can only say that we might do a review of the contract prices when the spot price comes down say by about 25% compared to the price at which the long term arrangements were originally signed,? he said.
Later speaking on the occasion ministry of steel secretary PK Rastogi said the Centre wants to bring together the mining and steel industry on a single platform wherein long term supply agreements can be signed to ensure continuous flow of raw materials to the steel industry. ?The idea is to create a win-win situation for both the industry. But that does not seem to happen as both the industries do not see eye to eye,? he said adding that the government will take all measures for the growth and development of the raw material and steel industry.