Posted on 28 May 2024
The mine worker’s strike at National Mineral Development Corporation (NMDC), which began in the first week of May, ended on Sunday, reliable sources inform Kallanish.
NMDC, India’s largest iron ore mining firm, faced production disruption at its Chhattisgarh and Karnataka mines due to workers demanding a wage hike.
NMDC typically revises workers' wages every five years, with the last revision in January 2022. However, staff were demanding another hike, contrary to the usual schedule.
The miner’s management had proposed a 12% increase, but workers were insisting on a 17% rise. A consensus was finally reached and mining operations resumed.
“While the strike has ended, NMDC’s production loss during this period is estimated to be around 1 million tonnes,” says an industry participant familiar with the situation.
Regarding whether iron ore prices would decrease with the resulting improvement in supply, he adds that a price drop seems unlikely. This is due to the recent Odisha Mining Corporation (OMC) auction where bids for iron ore fines increased by up to INR 1,000/t ($12) amid restocking before the monsoon.
OMC is another major iron ore mining company in India, which produced 33mt of iron ore in the fiscal year through March 2024 (FY24).
NMDC announces its iron ore prices at the beginning of each month. For May, the company increased lump ore by INR 400/tonne ($5) and fines by INR 200/t ($2). As a result, the cost of lump ore was at INR 6,200/t ($75) and fines were at INR 5,260/t ($63).
In FY24, NMDC produced 45.1mt of iron ore and achieved sales of 44.8mt, marking a year-on-year growth of 10% and 16%, respectively. For FY25, the company has set a production target of 50mt.
Source:Kallanish
