State-owned mining giant NMDC has clinched a 33-44 per cent lower rate on the long-term contracted prices for iron ore with Japanese and South Korean steel mills for the current fiscal.
"We have entered into the contract at the same rate as of Rio Tinto (considered the global benchmark). About 32.95 per cent down on iron ore fines and 44.47 per cent down on iron ore lumps from the last fiscal's contracted rates," NMDC Chairman Rana Som told PTI over phone from South Korea.
Elaborating on the deal, Som said the contracted rates for iron ore fines stand at $61.7 a tonne and that on lumps is at $71.5 a tonne.
Global mining giant Rio Tinto has earlier this year settled its 2009-10 long-term contract with Japanese steel mills at such discount.
The proposed price negotiation holds significance for the domestic steel companies like JSW and RINL as the rate settled by NMDC with overseas firms acts as a benchmark for them.
A team, led by Som, had left for the two Asian countries last week. While the pact was signed with the Japanese steel makers last week, the country's largest iron ore miner inked the pact with the South Korean mills today.
Of its annual iron ore production of about 30 million tonnes, NMDC had supplied over three million tonnes to Japanese and South Korean steel companies, including Posco, last year.
