India’s long-term agreements (LTAs) with Japan and South Korea for supply of iron ore which expired on March 31, 2021, will not be renewed owing to the shortage of the raw material in the domestic market, government sources said on Friday, June 18.
The sources said that the LTAs for supplies of iron ore to Japan and South Korea had been a bi-lateral arrangement between the countries in practice for the past several decades under which India agreed to supply pre-determined volumes of the raw material at concessional prices and a lower export duty of 10 percent against the 30 percent applicable for overseas shipments through normal market channels.
According to the sources, in view of falling production of iron ore in key producing states like Odisha, shortages of raw material available in the domestic market and expansion plans of domestic steel mills, the bi-lateral practice of LTA supply contracts with Japan and South Korea will be discontinued.
Until now state-run miner NMDC Limited had acted as the nodal agency to implement the LTAs negotiated bilaterally between India and Japan and South Korea. In the fiscal year 2020-21, under the LTAs NMDC had exported about 2.4 million mt of iron ore to these two countries.