The iron ore miners and the steel companies will sit across the table later this month to determine if iron ore should be sold at spot prices or entering into long-term contracts is feasible and good proposition for both the parties.
The first round of meeting between the two sides will be take place on August 22 at Bangalore. According to sources the meeting will be flowed up by another round on August 27 at Kolkata.
The steel industry has been pressing for long term contracts with iron ore producers to insulate itself against price volatility and ensuring raw material supply security.
The iron ore producers on the other hand have been noncommittal on the issue while certain quarters do not want to enter into any such contracts. The vexed issue of 15 % export duty, which the government levied on June 13 to increase domestic availability of iron ore will also be taken up for discussions. Steel firms say they need to raise prices as the cost of inputs is rising and a duty on iron ore, a key input for the industry, will increases domestic availability which in turn will keep prices at check.
Of the production of 200 million tones of iron ore, domestic consumption of the product is at 80 million tonne while exports are at around 100 million tonne.