India’s largest iron ore miner, NMDC Limited has sought government support to secure more iron ore reserves to check rising imports of raw material and get pricing power in the market, a company official said on Wednesday, September 16, citing regulatory filings of the company.
He said iron ore imports are seen to be rising at a fast pace as more and more local steel mills are sourcing raw materials from overseas and large miners like BHP Billiton, Vale, Rio Tinto enjoy pricing power with their scales of operations.
He said that as a government owned and managed miner, NMDC will be looking for greater support from the Indian federal government in increasing the number of iron ore reserves which alone will enable NMDC to significantly increase production, increase domestic supply and adopt an aggressive pricing strategy to compete with rising imported raw material.
However he declined to clarify whether NMDC is seeking exemption from participating in auction of iron ore reserves since the Indian government has made the auction route mandatory for allocation of all mineral resources to miners and investors.
NMDC which currently produces around 34 million mt per year of ore has set a target to ramp up production to around 75 million mt per year by 2018-19.
For the second consecutive year, India will be a net importer of iron ore. According to the Federation of India Mineral Industries (FIMI) by March 31, 2016, India will have imported around 10 million mt of iron ore against an expected export shipment of just 5 million mt during the period.