Kolkata: Public sector mining company Orissa Mining (OMC) will shortly slash prices of iron ore by 40 to 50 percent, a top company official said here Thursday.

"We have just fixed our iron ore prices, and the new rates would come into effect in the next three to four days," OMC managing director Santosh Sarangi told reporters on the sidelines of a seminar organised by the Confederation of Indian Industry.

After the price cut, OMC will sell iron ore lumps at prices ranging from Rs.1,700 to Rs.2,800 a tonne, and iron ore fines at Rs.700 to Rs.800 a tonne.

For lumps, the prices are down from a peak range of Rs.4,500 to Rs.5,600 a tonne while that of fines have come down from Rs.1,600 a tonne during the April-August period, Sarangi said.

The company sold 4.5 million tonnes of iron ore last fiscal and aims to sell 6.5 million tonnes this year, he added.

OMC is now planning to start entering into long-term contracts to secure offtake of its planned increase of its iron ore production.

"We plan to increase our iron ore production to 20 million tonnes by 2013-14. We will ensure that a significant part of it is sold once we start producing it, and we will start entering into long-term contracts," Sarangi said.

The company will get into coal mining in the next one year. It has already been allotted three coal blocks in Orissa and will approximately mine around 24 million tonne of coal in various places in that state, he said.