India: NMDC Hikes Iron ore Base Price in Karnataka E-Auctions

India's largest iron ore miner - National Mineral Development Corporation (NMDC) has announced a hike in floor prices in upcoming Karnataka e-auctions scheduled on 1st Mar’19. Iron ore base prices at NMDC Kumaraswamy have increased by around INR 400/MT in both fines and lumps.

NMDC has increased fines (Fe 62.8%) base price from Kumaraswamy mines by around INR 400/MT to INR 2,657/MT (basic) against last assessment INR 2,276/MT. Similarly, for Fe 63.8% lump prices have also increased by around INR 400/MT to around INR 3,176 /MT (basic) against last assessment INR 2,785/MT. All prices mentioned are basic, royalty and other taxes extra.

Prior to this, towards the beginning of this month, the miner had cut base prices by around INR 150-300/MT in both lump and fines.

According to the updates received, the NMDC Donimalai case has heard by the Karnataka High Court on 26th Feb 2019 and it has reserved the judgement till next hearing. The final remarks have been kept by both the parties before Karnataka High court bench.

Iron ore operations are on hold at NMDC’s Donimalai mine, which was renewed lease on 3rd Nov’18 for the next 20 years. But the State Govt. put the additional condition to pay 80% premium on iron ore sale value from Donimalai to the Karnataka state Govt. NMDC was in negotiation with the Govt of Karnataka over its decision to impose an 80% premium on iron ore sales from Donimalai. As the company’s earlier license did not include the premium.

NMDC Donimalai has EC limit of 7 MnT p.a. and produces around 6-6.5 MnT iron ore annually.