State-owned NMDC today said it expects a 40 per cent hike in the prices

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of iron ore supplied to Japanese steel mills under a long-term pact in next fiscal ahead of preliminary talks with the foreign manufacturers scheduled for Wednesday.

"I am expecting a 40 per cent hike in the rates of iron ore we supply to Japanese steel firms under the long-term contract for 2010-11. Preliminary discussions with them will start day after tomorrow," NMDC CMD Rana Som told reporters here.

Under the long-term arrangements with Japanese mills, Som said he expects prices of iron ore lumps and fines to settle at USD 110 per-tonne level and around USD 85 a tonne, respectively.

At present, NMDC supplies iron ore lumps to Japanese mills at around USD 71 a tonne and iron fines at USD 61 a tonne.

Iron ore prices had almost halved during the global economic slowdown.

On response of investors to its recently concluded Further Public Offer (FPO) he said, "It is very good...Selling about 33 crore shares in three days is overambitious...Retail investors bought equity worth around Rs 800 crore."

When asked if public sector institutions like LIC have bailed out NMDC FPO, he said, "It is a wrong perception. LIC is an institution which participates in both public and private sector offerings. It is wrong to say it has bailed out NMDC."