Press Information Bureau

Government of India

Ministry of Steel

20-December-2012 16:43 IST

The Minister of Steel, Shri Beni Prasad Verma has said that sales under export agreements are done on Free on Board (FOB) port basis whereas domestic sales are done on Free on Rail (FOR)/ Free on Truck (FOT) mine basis and as such these two types of prices are not directly comparable.  The export and domestic prices of iron ore of NMDC Limited, during the year 2012-13, are given below: 

In a written reply in the Rajya Sabha today Shri Verma said, Iron ore is in deregulated sector.  Prices of iron ore are fixed by the individual companies based on commercial prudence and general market situation. Being a Navratna Public Sector Enterprise, the commercial and financial decisions of NMDC including pricing of iron ore are taken by the Board of Directors of the company. The Government generally does not interfere in commercial decisions of the company. However, to improve availability of iron ore to domestic iron and steel industry at affordable price, the Government has increased the export duty on iron ore from 20% ad valorem to 30% ad valorem on all grades of iron ore (except pellets) with effect from 30.12.2011.   

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NSK/DB

Export duty on iron ore raised to restrict exports and improve domestic availability for industry. NMDC sets distinct export (FOB port) and domestic (FOR/FOT mine) prices that are not directly comparable; pricing decisions are taken commercially by the company's Board of Directors within a deregulated sector. The Government increased the export duty on iron ore (except pellets) to improve domestic availability and affordability, while generally refraining from intervening in NMDC's commercial pricing decisions.