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[Ferro-Alloys.Com]Steelmakers in India, the world's fourth-largest iron ore producer, are turning to imports of the raw material from South Africa because of the way domestic material is being priced, industry sources said Thursday.

Since March, Essar Steel has counted as its suppliers Kumba Iron Ore, the South African unit of Anglo American, and is in talks with Johannesburg-based Assmang Ore & Metal Co. for their first ore transaction, people familiar with the matter said.

Essar has so far bought 750,000 mt of 63%-Fe and 65%-Fe lump in five 150,000 mt shipments from Kumba, and last received 400,000 mt of material 6.3-31.5 mm in diameter in September and October, one of the sources said.

The long-term contracts are based on the five-day average of Platts 62%-Fe Iron Ore Index, which is on a CFR China basis, netted back for freight to derive an FOB value, he said. The lump premium, applied to the index that reflects the price of fines, is about $3/dry mt.

• [Editor:editor]