NMDC suffers Rs 746-cr revenue loss during 2007-10: CAG

"...Due to non-revision of domestic prices by the company (NMDC) in line with movement of market price, the company has suffered a revenue loss of Rs 754.94 crore during 2007-10," CAG said in a report, tabled in Rajya Sabha, today.

The government auditor also said by extending unwarranted reduction in price, had passed Rs 600.83 crore benefit to customers during 2010-11.

"Further, not increasing the prices by full percentage in line with increase in export prices led to a loss of Rs 227.40 crore during the same period," CAG said.

The government miner exports iron ore by entering into long-term agreements (LTA) with Japanese Steel Mills (JSM) and the price it gets is at par with what Australian and Brazilian exporters get from JSM.

LTA prices of exports formed the basis for determining the domestic prices for LTA with domestic customers, CAG said, adding that 95 per cent of NMDC's sales came from LTA and the rest were spot sales during 2005-12.

"Sales to domestic customers through LTA accounted for 84 per cent of its sales," CAG said.

State-run Rashtriya Ispat Nigam and private sector firms like JSW Steel, JSW Ispat and Essar Steel are NMDC's major customers domestically.

During 2005-12, NMDC contributed 13 per cent of India's iron ore production and met 26 per cent of the domestic iron ore demand. Last fiscal, it had sold 27.3 million tonnes iron ore valued at Rs 11,167.56 crore.

  

image
Business Standard
177 22
Business Standard

NMDC suffers Rs 746-cr revenue loss during 2007-10: CAG

Press Trust of India  |  New Delhi 



"...Due to non-revision of domestic prices by the company (NMDC) in line with movement of market price, the company has suffered a revenue loss of Rs 754.94 crore during 2007-10," CAG said in a report, tabled in Rajya Sabha, today.

The government auditor also said by extending unwarranted reduction in price, had passed Rs 600.83 crore benefit to customers during 2010-11.

"Further, not increasing the prices by full percentage in line with increase in export prices led to a loss of Rs 227.40 crore during the same period," CAG said.

The government miner exports iron ore by entering into long-term agreements (LTA) with Japanese Steel Mills (JSM) and the price it gets is at par with what Australian and Brazilian exporters get from JSM.

LTA prices of exports formed the basis for determining the domestic prices for LTA with domestic customers, CAG said, adding that 95 per cent of NMDC's sales came from LTA and the rest were spot sales during 2005-12.

"Sales to domestic customers through LTA accounted for 84 per cent of its sales," CAG said.

State-run Rashtriya Ispat Nigam and private sector firms like JSW Steel, JSW Ispat and Essar Steel are NMDC's major customers domestically.

During 2005-12, NMDC contributed 13 per cent of India's iron ore production and met 26 per cent of the domestic iron ore demand. Last fiscal, it had sold 27.3 million tonnes iron ore valued at Rs 11,167.56 crore.

  

RECOMMENDED FOR YOU

NMDC suffers Rs 746-cr revenue loss during 2007-10: CAG

Iron ore miner NMDC has suffered Rs 745.94 crore revenue loss during 2007-10 for not revising the domestic prices of the steel-making raw material in line with prevailing market rates, government auditor CAG said.

"...Due to non-revision of domestic prices by the company (NMDC) in line with movement of market price, the company has suffered a revenue loss of Rs 754.94 crore during 2007-10," CAG said in a report, tabled in Rajya Sabha, today.

The government auditor also said by extending unwarranted reduction in price, had passed Rs 600.83 crore benefit to customers during 2010-11.

"Further, not increasing the prices by full percentage in line with increase in export prices led to a loss of Rs 227.40 crore during the same period," CAG said.

The government miner exports iron ore by entering into long-term agreements (LTA) with Japanese Steel Mills (JSM) and the price it gets is at par with what Australian and Brazilian exporters get from JSM.

LTA prices of exports formed the basis for determining the domestic prices for LTA with domestic customers, CAG said, adding that 95 per cent of NMDC's sales came from LTA and the rest were spot sales during 2005-12.

"Sales to domestic customers through LTA accounted for 84 per cent of its sales," CAG said.

State-run Rashtriya Ispat Nigam and private sector firms like JSW Steel, JSW Ispat and Essar Steel are NMDC's major customers domestically.

During 2005-12, NMDC contributed 13 per cent of India's iron ore production and met 26 per cent of the domestic iron ore demand. Last fiscal, it had sold 27.3 million tonnes iron ore valued at Rs 11,167.56 crore.

  
image
Business Standard
177 22
Widgets Magazine

More News

Widgets Magazine
Widgets Magazine

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard