Mumbai: Indian firms have negotiated price increases of 80-97% for iron ore exports to Japan and South Korea, state-run trading company MMTC Ltd said.
The price of iron ore fines, a powdery material that is converted into pellets before being used by blast furnaces, will be raised by 79.9%, while iron ore lumps, used directly in furnaces without much processing, will cost 96.5% more, the firm said in a statement.
The new prices, negotiated by government officials and state-run firms MMTC and National Mineral Development Corp, were in line with benchmark prices settled with Australia, it said.
The two firms have 5 year term contracts with Japanese steel mills and South Korea’s POSCO till 2010, under which the quantities and prices are decided annually.
Exports to mills in Japan and POSCO would remain at last year’s level of 4.27 million tonnes, the statement said.
“As a result of the price settlement achieved this year, the iron ore exports to Japan and South Korea would earn foreign exchange to the tune of Rs25 billion ($520 million),” the release said.
India exports about 90 million tonnes of iron ore, mainly to China. Most of the sales are done on a spot basis, unlike other big suppliers who tie up long-term contracts.