Under the long-term arrangements with Japanese mills, NMDC expects prices of iron ore lumps and fines to settle at the $110 per-tonne level and around $85 a tonne, respectively

India's largest iron ore miner National Minerals Development Corp Ltd (NMDC) on Monday said it expects a 40% hike in the prices of iron ore supplied to Japanese steel mills under a long-term pact in the next fiscal ahead of preliminary talks with the foreign manufacturers scheduled for Wednesday.

"I am expecting a 40% hike in the rates of iron ore we supply to Japanese steel firms under the long-term contract for 2010-11. Preliminary discussions with them will start day after tomorrow," NMDC's chairman and managing director Rana Som told reporters.

Under the long-term arrangements with Japanese mills, Mr Som said that he expects prices of iron ore lumps and fines to settle at the $110 per-tonne level and around $85 a tonne, respectively.

At present, state-run NMDC supplies iron ore lumps to Japanese mills at around $71 a tonne and iron fines at $61 a tonne.

Iron ore prices had almost halved during the global economic slowdown.

On response of investors to its recently concluded follow-on public offering (FPO) he said, "It is very good. Selling about 33 crore shares in three days is overambitious. Retail investors bought equity worth around Rs800 crore."

When asked if public sector institutions like Life Insurance Corporation (LIC) have bailed out the NMDC FPO, he said, "It is a wrong perception. LIC is an institution which participates in both public and private sector offerings. It is wrong to say it has bailed out NMDC."