The central government on Thursday said it will soon announce a pricing mechanism for iron ore that would set a price band within which the mineral price would be allowed to fluctuate.
"We have set up a committee on iron ore pricing, which will present its report in the next 15-20 days, at the most in a month's time," Minister of Steel Chaudhary Birendra Singh told BTVi in an interview.
"Thereafter, we'll fix certain benchmark pricing, so that there are no fluctuations," he said.
"If there is a benchmark, then variations up to 10-12 per cent is alright... but 30-40 per cent fluctuation is too much volatility," he added.
The government does not want high volatility in the iron ore market and wants the mineral prices to be as competitive as possible for steel companies.
In a separate interview with the channel, Steel Secretary Aruna Sharma said: "State-run iron ore miner National Mineral Development Corporation Ltd (NDMC Ltd) needs to keep in mind the interest of its private steel making consumers while deciding on pricing."
"Our strength is our iron ore deposits, but we also have to look at the pricing process. It can't be so expensive that steel making itself becomes non-competitive," Sharma said.
"We have to look holistically at the complete value chain. Profits, yes... but no profiteering," she said.
"The NMDC has to come to a discipline and a system. Being a big player, their pricing will hit private players," she added.