By Our Correspondent
NEW DELHI/BHUBANESWAR: RL Mohanty, Vice-President of Federation of Indian Mineral Industries (FIMI) on Friday addressed an online event on “Risk Management for Iron Ore Markets and Prices”, organized by FIMI in New Delhi in the august presence of Shantesh Gureddi, Vice President, FIMI and representatives from Singapore Exchange Limited (SGX) and S&P Global Platts and RK Sharma, Secretary General, FIMI.
“ At the outset, I compliment FIMI for organizing this important webinar in niche area for deliberating risk management for iron ore markets and prices for the mining industry. India produces around 220 million tonnes of iron ore annually, mainly mined in the States of Odisha, Chhattisgarh, Karnataka and Jharkhand. With steel demand rebounding post COVID outbreak, iron ore has been one of the best performing commodities in a year of high volatility across multiple asset classes – both globally as well as i n India. As such, risk management for iron ore has never been more important,” RL Mohanty, who is also heading MGM Group of Companies along with his Brother Pankaj Lochan Mohanty in Odisha, said.
“Considering the uncertainties in the commodity cycle, it is essential to understand the current dynamics of steel / iron ore markets and its business implications to be able to better manage the risk of volatile iron ore prices and supplies for all stakeholders, including mining companies, steel plants and traders, “ the FIMI VP Mohanty said.
“The mining industry faces financial risks to its profitability, cash flows and in entire value chain. The risks have shown to arise as a consequence of volatility in the exchange rates, interest rates and commodity prices. In India, there is no structural mechanism for iron ore pricing and it directly depends on the demand and supply mix. There is risk involved for both supplier and seller in the market due to fluctuating pricing,” Mohanty said,
“I feel that there is a need for increasingly scientific approaches to the estimation of risks in mining. To mitigate the risk there is requirement of scientific tools to inculcate improvement in quantity, quality as well as pricing of iron ore. So that, mining industry can have access to security in future market. Hedging is one of the risk management tools for allowing mining companies to protect their profitability, revenue flows and balance sheets from the damaging effects of the commodity prices due to downside movements,” he said.
“I hope this online event will help in showcasing the risk management strategies for iron ore market and prices. It will deliver possible solutions to provide security in the iron ore market for the mining industry in the future. I strongly believe that the deliberations during this event will be lively and interactive and it will influence and create capacity for risk management for iron ore markets and prices.With these words, I once again welcome you all to the online event on “Risk Management for Iron ore markets and Prices” and wish all the very best,” Mohanty added.
