KOLKATA (miningweekly.com) - India’s NMDC Limited increased iron-ore production to 4.94-million tonnes during the first two months of the current fiscal year, up from the 4.90-million tonnes produced during the previous corresponding period.

In April and May, the country’s largest iron-ore miner produced 3.56-million tonnes from its mines in the central Indian province of Chhattisgarh and another 1.38-million tonnes from Karnataka, in southern India.

NMDC dispatched 5.65-million tonnes of ore in April and May, which included carry-over inventories, according to data released by the company.

Meanwhile, the miner also announced a hike in iron-ore sales price for June, the first in the last five months.

The company increased prices of high-grade lumps by 7% to $77/t and that of high fines by 9% to $53/t, a company official said, unofficially, as he was not authorised to comment on pricing strategy.

The decision to hike prices at a time when international iron-ore prices were in a tailspin had drawn criticism from local steel producers.

NMDC planned to ride the domestic shortage in iron-ore following the closure of mines in Odisha and improve its earnings, forcing local steel producers to resort to imports to meet their raw material requirements, an official in a steel company said on condition of anonymity, as his company was a customer of NMDC.

Indian steel companies were facing a shortage of iron-ore following the Supreme Court order closing down 26 mines in eastern province of Odisha, which accounted for around 50% of the total 70-million tonnes of ore produced from the province annually.

The double whammy of short supplies and increasing domestic prices, contrary to global trends, was forcing local steel companies like Tata Steel and JSW Steel to begin scouting for imported iron-ore to maintain raw material supplies and plant capacity use.

JSW Steel had commenced imports and its first shipment was expected to arrive around this month end and total iron-ore imports during the current fiscal year had been estimated at around 500 000 t, according to a company official.

Tata Steel has also placed a trial contract for 30 000 t from Australia and was planning to contract larger volumes in the next few months, according to industry sources, although no confirmation was available from the company.

According to analysts, iron-ore imports during April and May were mostly trial contracts equating to an estimated 35 000 t, but this was expected to shoot up in June when three shipments were expected, with imports increasing by 250 000 t, resulting in total imports of around 300 000 t during the first quarter of 2014/15.