State-owned trading giant MMTC has inked pacts with Japanese and South Korean steel companies including Posco, to supply 2.8 million tonnes of iron ore annually for a period of three years.
"We have signed iron ore supply contracts with five Japanese firms and one South Korean company for a period of three years. The exports are expected to start from July this year," an MMTC official told PTI.
Under the pact, MMTC will supply 2.3 MT of iron ore per annum to five Japanese firms including Nippon Steel Corporation, JFE Steel Corporation and Nisshin Steel besides 0.5 MT to South Korean major Posco, the official said.
An official delegation of MMTC had visited Tokyo and Seoul this month to sign contracts with the firms.
The Cabinet, in March, had approved export of iron ore by MMTC to Japanese and South Korean steel mills for three more years.
The supply of iron ore, although in smaller quantities, has been a core element in the bilateral ties with Japan and South Korea and would further strengthen the relations, the official said.
MMTC would supply iron ore (lumps and fines) of grade (plus) 64 Fe, or high grade content, to Japanese and Korean steel mills from country's largest iron ore miner NMDC's Baildila mines in Chhattisgarh.
MMTC's earlier contract to supply iron ore for five years to Japanese and Korean steel mills had expired on March 31, 2011 and was pending as price negotiations had not taken place.
India, the third-largest global exporter of iron ore, had exported 97.64 MT iron ore in the 2010-11, down from 117.3 MT in 2009-10. The figure for the 2011-12 is estimated at about 60 MT on account of less production due to ban in Karnataka.
India's iron ore exports are likely to decline to 50 MT in the current fiscal, as per the miners' body Federation of Indian Mineral Industries (FIMI) estimates.
Iron ore shipments from Karnataka, a major exporter of the raw material from the country, have been stopped since July, 2010, following allegations of widespread corruption.
Also, the exports were impacted after the government had hiked the export duty on iron ore to 30% in December last year from 20%.
Freight on iron ore for domestic consumption was increased by 20% early in March while the rates were reduced by 16% on ore exports.