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Source: India's largest miner changes from global index to local pricing for iron ore

A source with first-hand knowledge of the situation said that India's largest iron ore producer NMDC was testing a new formula to price its products in order to protect its profits from global benchmarks.

NMDC (the state-run company that sells its iron ore locally) releases monthly prices of iron ore based on inventories, international price and domestic market dynamics.

Source refusing to identify themselves as the plan has not been made public, said that the company intends to launch its new formula following initial trials.

The source continued, "We are making baby steps."

Source: The new formula won't link prices to any index or exchange international, source.

The source added that the intervals have not yet been finalised.

The source stated that "we will do this more often in the future so there is no delay between what is happening on the market and the prices we charge."

Source: The miner would also gather pricing information across different stockyards in cities as opposed to the current mechanism for gathering information at mines.

NMDC didn't respond to an email asking for comments.

India's JSW Steel is the largest steelmaker in India by capacity and sources most of its iron ore from NMDC.

NMDC's profit for the fourth quarter fell due to lower product prices.

India is also working to increase the average iron ore sale price to generate more revenue for the government. The mines ministry believes that some miners artificially lower prices to avoid paying higher royalties. Reporting by Neha arora. (Editing by Nidhh Verma, Mark Potter and Nidhh Verma)

(source: Reuters)