NMDC seeks centre's nod for direct exports

State-owned National Mineral Development Corporation (NMDC) is lobbying with the union government to allow it to undertake direct iron ore exports.

At present NMDC executes iron ore export orders through the Minerals and Metals Trading Corporation Limited (MMTC), as per central government directives.

The decision comes at a time when the commission for MMTC is likely to exceed Rs 25 crore this year because of the burgeoning iron ore export market.

MMTC has been acting as a canalising agent in iron ore exports for NMDC for the last several years and has been collecting lucrative commissions to the tune of crores of rupees.

NMDC, which supplies iron ore for exports, paid around Rs 25 crore last year as commissions to MMTC. The commission to MMTC is likely to exceed Rs 25 crore this year due to the high iron ore prices in the international market.

"Japanese steel mills have been importing NMDC's iron ore for the last several years. We have been supplying the ore from our mines. In this export deal, MMTC, which was appointed as a canalising agent by the central government, is enjoying the fruits by way of commission on the iron ore export value. A striking case in point is the fact that NMDC was paid $25 a ton of iron ore from Japan and $40 to $50 a ton from China. MMTC, without any effort, is earning a three per cent commission," senior NMDC officials told Business Standard.

MMTC has been exporting iron ore from Visakhapatnam and Chennai ports to Japan and China for the last several years. For these exports, NMDC has been supplying around 40 lakh tons of iron ore from Bailadilla mines, and around 30 lakh tons from Donamalai mines.

"In the last fiscal, NMDC supplied iron ore worth around Rs 750 - 800 crore from the Bailadilla and Donamalai mines to MMTC for exports. For its nominal role as a canalising agent, MMTC earned a three per cent commission on these exports. We exported around four lakh tons of iron ore in 2001 to other countries including Japan last year. This year direct exports from Visakhapatnam port is expected to touch around 3.5 lakh tons. Now that we have gained experience in exporting, we plan to seek the government's permission to export iron ore directly sans any canalising agent," the sources said.

The corporation is increasingly exerting pressure on the union ministry for eliminating the role of the canalising agent in iron ore exports. "Despite many representations, the central government has not yet given a nod. Though a herculean attempt, we are continuing our effort in a hope to get the cabinet's approval," sources said.