Iron ore rates seen up 20%

Domestic iron ore prices are likely to go up more than 20 per cent next financial year, B Ramesh Kumar, chairman & managing director, National Mineral Development Corporation (NMDC), said at Metal Junction - Metal Bulletin's Indian Steel Conference here today.

"Price increase in iron ore is likely to be more than this year's increase of 18.6 per cent as long-term supply negotiations in the international market for the next financial year are being held at an increase of more than 20 per cent over current prices," Kumar said.

Shortage of supply and availability concerns have led to the increase, he added. NMDC is looking at increasing its mining capacity to 30 million tonne in five years from the current 22 million tonne.

The company has planned an investment of Rs 600 crore over the next few years to develop two iron ore mines in Chattisgarh and Karnataka.

"We are looking at developing the Bailadala 11-B mine in Chattisgarh and the Kumarswamy mine in the Bellary district in Karnataka. We will invest Rs 300 crore each for the development of these mines," Kumar said.

The company is also planning to increase the capacity to produce calibrated lump ore to 3 million tonne from the current 2 million tonne.

Kumar also said that Chinese imports are expected to increase significantly in the next few years. "NMDC's exports to China have increased in the current year, while exports to the other countries have come down," Kumar said.

Meanwhile, Bill Preston, general manager, department of industry and resources, government of Western Australia, said, "Prices of iron are expected to go up more than 20 per cent in the next year."

Price negotiations by the Japanese and the Brazilain mining giants were already witnessing an increase of around 20-22 per cent over current prices.