NMDC ups iron ore prices after Odisha mine closures

NMDC ups iron ore prices after Odisha mine closures

 India's biggest iron ore producer NMDC Ltd has raised ore prices by up to 9 per cent in June, two officials said on Wednesday, the first increase in five months as supply has been cut by a temporary ban on some mines in Odisha state.

The price hike will add to the problems of steelmakers such as JSW Steel Ltd, which has been forced to try out low-quality ore from Goa state to cope with lower supply of higher grades from Odisha.

Supreme Court ordered the closure of nearly half of Odisha's 56 mines two weeks ago due to the non-renewal of years-old leases. The closed mines accounted for about half of the state's output of more than 70 million tonnes last fiscal year. Odisha has since renewed the licences of eight mines and the state expects output in 2014-15 to hold around last year's level despite the short-term hit, according to its mines director Deepak Kumar Mohanty.

Given the expected rise in demand for NMDC's ore, the company has raised prices for iron ore fines by 9 per cent to Rs 3,160 per tonne and by 7 per cent to Rs 4,600 for lumps, two company officials said.

India was once the world's largest exporter of iron ore, shipping out a record of more than 117 million tonnes in the fiscal year through March 2010. It slipped to No.10 last fiscal year, with estimated exports of less than 20 million tonnes due to restrictions aimed at curbing illegal mining in various states.

Goa has traditionally exported most of its iron ore to China as local steel mills preferred using higher-quality ores.

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