Consulting firm KPMG would work on the pricing mechanism for iron ore supplied by NMDC to steel companies in the country.
The country's largest iron-ore producer has hired KPMG to devise a pricing mechanism following complaints by steel companies that NMDC is overcharging them. Media reports suggest that the new pricing mechanism may be implemented from January 2013.
Steel companies in the country argue that NMDC charges higher price for iron ore than what is prevalent in the international market. Iron ore accounts for a quarter of steelmaking costs.
NMDC has never settled on a stable pricing formula, confounding its buyers. It set monthly prices for October and November, dropping rates twice in succession.
But it set rates for a three-month period between July and September, raising prices by up to 13 percent. Ironically, spot prices of the benchmark 62 percent ferrous grade fell from $149 a tonne in April to around $100 in September. Prices have risen around 20 percent since October.
Meanwhile, it is learnt that NMDC plans to ramp up its ore output to 40 million tonne by 2014-15 from 27 million tonne now and further to 50 million tonne by 2020.
During the six months to September, it sold 12.7 million tonne of iron ore, compared to 14.4 million tonne in the year-ago period. For the September quarter, turnover fell by 15 percent to 2,612 crore, and net profit declined by 14% to 1,679 crore.