The Hindu : Business : Government asked to benchmark ore prices

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Saturday, Feb 23, 2008
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Government asked to benchmark ore prices

Special Correspondent

NEW DELHI: The Indian Chamber of Commerce on Friday urged the Government to direct public sector mining companies to prioritise the supply of iron ore to domestic steel producers at a reasonable price under long-term contracts.

“We are not asking for a regulator in pricing of iron ore by public sector mining companies. But, we want the Government to benchmark ore prices in the long-term interest of steelmakers,” Chamber Vice-President Vishambhar Saran said here at a conference.

Mr. Saran noted that the Government should direct state-owned mining companies to provide the basic raw material to domestic steel producers on long-term contracts. The pricing of the ore, he said, could be linked to the cost of mining with an annual cost escalation factored in so as to ensure a reasonable return on their investments.

To put a check on overseas sales, Mr. Saran sought an immediate ban on the export of iron ore with ferrous content above 62 per cent. He also suggested imposition of a 25 per cent tax on ore exports on ad valorem basis in the interim period.

Alongside, as a measure to bring the steel majors on track, the ICC Vice-President pointed out that the existing companies which already having captive mining leases should not be granted any more fresh leases merely on the basis on their proposed expansion plans because some of these companies have continued to hold on to their mining leases for years without undertaking any significant mining operations.

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