India's NMDC sets iron ore export rates at double FY10 benchmark

NEW DELHI May 31 (Reuters) - India's largest iron ore producer, NMDC Ltd (NMDC.BO), has finalised quarterly contracts with Japanese and South Korean steelmakers at prices up to double the 2009/10 benchmark, a top official of the company said on Monday.

The price jumps for the April-to-June quarter are between 93 percent and 100 percent over the 2009/10 benchmark and the actual prices at which the company will sell the iron ore would range between $120 and $140 a tonne FOB, Rana Som, chairman of the state-run NMDC told reporters on the sidelines of a conference. "It will be a price for three months only. After that there will be further negotiations," Som said, adding that it would be with retrospective effect.

The new pricing system was based on average prices from several indices.

NMDC aims to export 3 million tonnes of iron one in the current fiscal year that started on April 1, slightly higher than what it exported in 2009/10, Som said.

NMDC supplies iron ore to Japan's Nippon Steel (5401.T), Kobe Steel (5406.T), Mitsubishi Steel (5632.T), JFE and South Korea's POSCO (005490.KS).

The company aims to produce 30 million tonnes of iron ore this fiscal year, up from its 2009/10 output of 24 million tonnes.

The low output last year was due to Maoist rebels damaging a pipeline that connects NMDC's mines to steel plants in east India in May last year.

"I am planning for 30 million tonnes, expecting that at the most by six months time the pipeline should be restored," Som said. (Reporting by Ruchira Singh; Editing by Unnikrishnan Nair)