The central government on Thursday said it will soon announce a pricing mechanism for iron ore that would set a price band within which the mineral price would be allowed to fluctuate.
"We have set up a committee on iron ore pricing, which will present its report in the next 15 - 20 days, at the most in a month's time, " Minister of Steel Chaudhary Birendra Singh told BTVi in an interview.
"Thereafter, we'll fix certain benchmark pricing, so that there are no fluctuations, " he said.
"If there is a benchmark, then variations up to 10 - 12 per cent is alright. . .
but 30 - 40 per cent fluctuation is too much volatility, " he added.
The government does not want high volatility in the iron ore market and wants the mineral prices to be as competitive as possible for steel companies.
In a separate interview with the channel, Steel Secretary Aruna Sharma said: "State - run iron ore miner National Mineral Development Corporation Ltd (NDMC Ltd) needs to keep in mind the interest of its private steel making consumers while deciding on pricing. "
"Our strength is our iron ore deposits, but we also have to look at the pricing process.
It can't be so expensive that steel making itself becomes non - competitive, " Sharma said.
"We have to look holistically at the complete value chain.
Profits, yes. . .
but no profiteering, " she said.
"The NMDC has to come to a discipline and a system.
Being a big player, their pricing will hit private players, " she added.
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