PTI cited government auditor CAG as saying that iron ore miner NMDC has suffered INR 745.94 crore revenue loss during 2007-10 for not revising the domestic prices of the steel-making raw material in line with prevailing market rates, due to non revision of domestic prices by the company in line with movement of market price, it has suffered a revenue loss of INR 754.94 crore during 2007-10.
CAG said that by extending unwarranted reduction in price, NMDC had passed INR 600.83 crore benefit to customers during 2010-11.
It said that "Further, not increasing the prices by full percentage in line with increase in export prices led to a loss of INR 227.40 crore during the same period."
The government miner exports iron ore by entering into long term agreements with Japanese Steel Mills and the price it gets is at par with what Australian and Brazilian exporters get from JSM.
It added that LTA prices of exports formed the basis for determining the domestic prices for LTA with domestic customers, 95% of NMDC's sales came from LTA and the rest were spot sales during 2005-12.
It further added that "Sales to domestic customers through LTA accounted for 84 per cent of its sales."
