Mumbai: The national Mineral Development Corporation (NMDC) will set up a 50:50 joint venture with global mining giant Rio Tinto to prospect for iron ore and other minerals both within and outside the country, its chairman Ran Som said.

''We are jointly scouting in Orissa and Tamil Nadu.'' Som said after signing the agreement. ''There are opportunities still in Australia and Brazil," he added.

The joint venture would focus on iron ore and would also be open to other minerals, he said, adding the company will revise its iron ore prices, effective 1 April 2008.

NMDC, which plans to hike iron ore prices for foreign steel makers under long-term contracts, has moved the commerce ministry seeking a reduction in export duty on iron ore.

NMDC is seeking raise iron ore prices by up to 97 per cent for foreign steel makers for long-term contracts, a move which the commerce ministry opposes, as it feels the price hike will be against the long-term trade interests of the two countries.

NMDC expects the commerce ministry to approve the duty cut from 15 per cent ad-valorem at present to the earlier Rs300 a tonne for long-term contracts.

It will also seek waiver of the Rs1,000 additional railway surcharge on iron ore for overseas shipments.

Som said there was a mid-term revision for domestic consumers effective 1 October 2007 and that will be absorbed and adjusted with the revision in April.

The proposals aim at making NMDC's iron ore exports to Japanese and South  Korean steel mills financially viable.     

According to the commerce ministry, NMDC's plan to raise higher tariff for exports to Japan and Korea would also raise its domestic long-term prices upwards from Rs2,546 to Rs3,510 a tonne.    

Steel ministry also opposes a domestic price hike as it would work against the government's inflation control measures. The ministry, however, has given a go-ahead to the proposed price hike for negotiated overseas contracts.

(See: NMDC in talks with Rio Tinto over JVC: report)