Several steel mills in the country are resorting to iron ore imports instead of domestic sourcing because of quantity and quality issues.
Quoting JSW’s exercise of importing high grade (50 to 64 grades) ore and operating its mills, H Noor Ahmed, President of the Federation of Indian Mineral Industries (FIMI), said, “This is not sustainable in the long run. Precious forex cannot be used for importing raw material available locally.”
The government should work towards removing bottlenecks and make policies industry friendly, he added.
In the wake of shortage, JSW is importing 6 lakh tonnes every month and it may end up importing 3-4 million tonnes this year.
Globally, there is surplus production of iron ore to the tune of 79 million tonnes and by 2015 it is expected to be 158 million tonnes.
In India, iron ore production is down 36.36 per cent to 140 million tonnes from a high of 220 million tonnes. New production has mainly come from Canada, South Africa, Brazil and Australia.
Traditional iron ore producers such as Brazil and Australia have substantially increased their output, said Ahmed.
“From Canada, which is such a far off place, we import ore,” he added.
Because of slow growth of the steel industry, the ore domestic production has always been export-fed. The iron ore production which was 66.58 million tonnes in 1995-96 went up to 218.55 million tonnes in 2009-10 because of export demand, mainly from China.
Ahmed said, “This did not seem to be palatable to the domestic steel industry under whose pressure, the UPA Government imposed export duty, which went up suddenly to 30 per cent in December 2001.”
In addition, railway freight was also increased 3.6 times the domestic freight. This made Indian iron ore totally uncompetitive which resulted in collapsing iron ore exports from 117.37 million tonnes in 2009-10 to 14.42 million tonnes in 2013-14, resulting in job loss of about one million, direct and indirect.
According to Ahmed, FIMI is holding its annual Mining exploration convention and trade show in Bangalore from September 18 to 20. The fourth in the series, the show has attracted 350 participants both domestic and international companies.
Source: The Hindu Business Line
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