NMDC Embraces Index-Based Pricing, Signals ₹12,000 Cr Capex Push and Record April Performance

In a move that could reshape India’s iron ore pricing landscape, state-owned mining major NMDC Ltd has launched a trial run of index-based pricing, aligning its rates with global benchmarks like the Platts IODEX index. This bold shift, initiated in April 2025, is aimed at improving price transparency, simplifying royalty calculations, and eventually opening new doors for exports.

According to documents presented at a recent Steel Ministry review meeting, NMDC’s new pricing mechanism links 70% of the rate to Platts IODEX, 20% to the company’s own e-auction results, and 10% to auction prices from the Odisha Mining Corporation. All prices are adjusted for currency exchange rates, offering a dynamic, market-driven approach.

“This transition aligns our pricing with international norms and enhances stakeholder transparency,” NMDC noted during its performance briefing. The company has historically relied on a 12-month average selling price model, which was often criticized for its lack of clarity.

Industry analysts say the shift could eventually standardize pricing across India’s fragmented iron ore sector, improve profitability, and support steel manufacturers with more predictable input costs.

Meanwhile, NMDC is building strong operational momentum. It reported its highest-ever April production in FY26, up 15% YoY, and a 3% rise in sales. This follows a record-breaking Q4 performance, marking the company’s best-ever quarterly sales.

On the capital front, NMDC is pressing ahead with a ₹12,000 crore expansion plan. Of this, ₹4,800 crore worth of projects had materialized by April 2025, with another ₹2,000 crore targeted for this fiscal. The FY26 capex budget stands at ₹3,517 crore.

The company has also optimized its land lease deal with RINL, securing a 30-year agreement that cut associated costs by ₹171 crore.

NMDC’s Tokisud coal block is on track for completion by November 2025, with ₹333 crore of the ₹574 crore projected cost already invested. For the Rohme coal block, development is expected later this year, with a total planned investment of ₹2,700 crore.