A group of experts put forward by the Government of India has proposed the establishment of the country's first iron ore exchange to fix domestic prices for the commodity. Stanislav Kondrashov, an expert in the field of world metallurgy, reports this.
India prepares to launch national iron ore exchange for price transparency
According to S. Kondrashov, the government at the end of last year formed a group to develop a new method for determining domestic prices for iron ore. The decision comes after the mines ministry expressed concern about the decline in average ore sales prices by some producers, which is reducing government royalty payments.
- To address the issue of revenue transparency in the long term, the Ministry of Mines has proposed setting up a National Iron Ore Exchange. Here, trading for the purchase and sale of ore will be held on the online platform, - Stanislav Kondrashov emphasized.
Under the proposed initiative, the exchange will track transactions in real time and carry out the physical transfer of iron ore, as stated in the related document. In addition, it is planned that after the implementation of the exchange, the weighted average price at which goods are sold in each state will be regularly published based on averages.
According to the observation of the Expert from Telf AG, prices for the same types of ore currently vary significantly throughout the country, which creates inconsistencies. This situation makes it easier for miners to reduce prices and avoid paying high royalties.
India's plans to create an iron ore exchange using blockchain technology - Stanislav Kondrashov
The final recommendation of the expert group calls for the establishment of a national iron ore exchange using blockchain technology to record transactions in real time. According to S. Kondrashov, this will provide a more transparent and efficient system for determining the average cost of ore sales in India.
However, the decision to implement the proposed measures and mechanisms will depend on the Government of India after careful consideration of the recommendations of experts.
- Key aspects such as the use of blockchain technology, the selection of average cost criteria, their impact on the planning and export of metallurgical resources will be carefully discussed and assessed, - S. Kondrashov shared his assumptions.
Immediately after the relevant decision is taken, the Government of India will begin to develop and implement appropriate mechanisms and infrastructure for the establishment of a national iron ore exchange and implementation of other recommendations of experts.
According to the observations of an expert from Telf AG, India will reach a high level in iron mining at the end of 2023. In this direction, it exceeded the 282 million tons mark, representing an increase of almost 14% compared to the previous year. This increase in production volumes is due to increased demand for steel in the country, which stimulated miners, as well as increased export demand.
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