MMTC gets nod for new pacts
Cabinet allows MMTC to enter into fresh agreements with Japanese, Korean and Chinese steel mills for selling iron ore.india Updated: Mar 30, 2006 16:15 IST
The Union Cabinet on Thursday allowed state-run trading firm MMTC Ltd to enter into fresh agreements with Japanese, Korean and Chinese steel mills for selling iron ore, but reduced the annual ceiling for high-grade ore exports from the famous Bailadila mines in Chhattisgarh.
"The Cabinet today gave its approval to permit MMTC to enter into fresh Long Term Agreements. The existing LTAs for supply of iron ore comes to an end by March 31 and the new agreements would be for a period of five years," Information and Broadcasting Minister PR Dasmunsi told reporters.
The Cabinet also decided to lower the annual ceiling for exports from the Bailadila mines to 2.7 million tonnes of lumps as against 3.0 million tonnes and 1.81 million tonnes of fines compared to 3.8 million tonnes per year.
The Bailadila mines produce iron ores with over 64 per cent iron content. The ore is exported to countries like Japan but there has been demand from the domestic industry to reduce exports of high-grade ore to meet the local requirements.
The fresh LTAs to be signed by MMTC primarily revolve around quantity and duration of the contract and would determine how much iron ore can be exported by the company. The fresh agreements would help in increasing exports of iron ore, resulting in greater inflow of foreign exchange, enhancing economic activities and creating more jobs.
India is the world's third-largest iron ore exporter after Australia and Brazil. Ore exports have been steadily rising over the past few years, particularly to China in view of the booming construction sector there.
The government's National Steel Policy envisages raising iron ore exports to 100 million tonnes by 2019-20 after meeting the domestic demand.