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Mining in Chindia is booming but it is only the first step.

July 8, 2009

Analysis of:Mining industry: On a growth trail | economictimes.indiatimes.com

The mining industry continues to enjoy a boom period in the near future. Chindia will countinue to benefit from this boom. Naturally, mining the raw material is only the first step; the concentrating the ore, transportation and most importantly recovery of the mined land are equally important. This requires futher investment. Public and private initiatives are vital.

Decline in Indian iron ore exports: Comparing Apples & Oranges

April 27, 2009

Analysis of:India iron ore exports sank over 50% in April. | www.yourindustrynews.com

Comparison of current statistics with previous years, especially last two years, is comparing apples and oranges. The unprecedented credit cruch and the consequent effoects on global economy, particularly on the metals and mining industry, makes comparison meaningless. Fort the same reeson it would be in appropriate to compare in future any statistics with that of current situation. India is well known as the leading supplier of iron ore to the SPOT market; its fortunes will be cyclical and prices will remain volatile. MMTC and others in India would be better off in adopting an index based pricing formlua tied to bench mark of steel prices. This would enable them to smooth out prices, thereby assuring some steady business.  

Steel industry needs to learn from aluminium and copper

April 17, 2009

Analysis of:Iron-Ore Price Drop Likely | online.wsj.com

Drop in iron ore prices may be good news for steel producers but there is a larger issue that the industry needs to address. Steel is the only major metal industry that has its prices of basic raw material de-linked from the metal price. The annual negotiations between a few become the industry bench mark for iron ore, even though the resulting steel prices vary during the year, dictated by changing economic conditions, supply demand and competition. This creates un necessary risk. Aluminium and copper industries mitigated this risk by linking the alumina and copper concentrates prices to universally accepted LME prices of aluminium and copper respectively. This eanbles both the suppliers and producers to hedge the price risks. Universal price mechanism for steel is still in its infancy. Like the aluminium producers in the 80s, steel producers are opposed to it. But the lessons are clear.

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