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Sunday, January 8, 2012

Resume iron ore exports to Japan - Foreign Secretary

Sunday, 08 Jan 2012

India’s foreign secretary Mr Ranjan Mathai has sent an SOS to commerce secretary Mr Rahul Khullar suggesting that he send a team to Tokyo to promptly conclude talks on the Long Term Agreement that fixes ore prices for five years and resume exports.

In his letter, dated December 30th, Mr Mathai underlined the urgency by referring to the assurances given by Indian prime minister Dr Manmohan Singh to his Japanese counterpart Mr Yoshihiko Noda at their recent bilateral summit.

Mr Mathai said that on July 7, the cabinet had cleared the LTA’s renewal and exports by Minerals and Metals Trading Corporation.

He added that “Our iron ore exports to Japan though small has connected us historically and has been the foundation of the present day diversified and intense bilateral trade and economic relationship. The delay in finalizing the LTAs by India has been viewed with concern by the Japanese side.”

The Japanese premier raised the issue with Dr Singh on December 28 during his recent visit to India. He assured his Japanese counterpart that we will address their concern.

As per the existing LTA between NMDC and these nations which expired on March 31 last year each year the PSU supplied 2.3 million tonnes of iron ore to Japanese steel mills. This stopped in February 2011.

The steel ministry had expressed a view that the exports should not be allowed as the Comptroller and Auditor General and the Income Tax Department had raised objections. The CAG had questioned the rationale behind exporting iron ore when local demand for it was on the rise. The I T department criticised NMDC for selling at long term prices instead of spot prices and losing substantial revenues.


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