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State-controlled mineral producer NMDC has decided to pause on an earlier decision to cut prices. In the current financial year so far, it has cut by 5.15 per cent. The decision follows a fall in iron ore prices over recent weeks and rising production at NMDC. According to a Focus Economics report, “Ample supply and modest demand have caused iron ore prices to plummet this year and November’s price was 24.2 per cent lower on a year-to-date basis.” NMDC cut ore prices last month. Lump ore from October 5 was Rs 2,300 a tonne and fines at Rs 2,060 a tonne, compared to Rs 2,400 a tonne and Rs 2,160 a tonne, respectively, in September. In the period from April to October, first seven months of the financial year, NMDC produced 18.23 million tonnes of iron ore and sold 19.8 mt. NMDC is under the ministry of steel, not the ministry of mines.
Senior officials at the former ministry have been regularly making public statements that iron ore must be cheaply available to domestic steel producers. “It seems the company succumbed to pressure from steel producers and the ministry,” said an analyst. Critics say NMDC’s ore has been sold to steel making companies in the Hospet, Karnataka, region at a price which is Rs 4,000 tonne less than that imported by buyer companies in the region. This indicates transparent price discovery is not happening.