Nippon Steel & Sumitomo Metal Corp , Japan's biggest steelmaker, said on Friday it had renewed a contract to buy 1.8-2.6 million tonnes of iron ore annually from India's state-owned Metals & Minerals Trading Corp (MMTC) over three years.

The deal follows the approval by India's cabinet in June to renew a long-term contract between MMTC and Japanese steelmakers for the supply of high-grade iron ore, despite growing pressure in India to use its natural resources to meet domestic needs.

Under the contract, India will supply 3.0-4.3 million tonnes of the steel-making material a year to Japanese steelmakers.

JFE Steel, a unit of JFE Holdings Inc, and Nisshin Steel Co Ltd said they had also renewed their contracts with MMTC, but declined to disclose their purchase volumes.

A Kobe Steel Ltd spokesman said it could not immediately confirm whether or not the firm had signed a deal.

Despite the plunging price of iron ore in an oversupplied global market, Japan's steelmakers want to diversify procurement sources to ensure a long-term supply of the raw material, as Japan depends on Australia and Brazil for its imports.

In the fiscal year that ended March 2015, Japan imported a total of 136.8 million tonnes of iron ore, 61.1 percent of which came from Australia and 26.5 percent from Brazil. (Reporting by Yuka Obayashi; Editing by Mark Potter)

 

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