In a move to keep more of the raw material at home, the Indian steel industry today demanded that the government place a quantitative restriction on iron ore export at 90 million tonnes for the current year."Iron ore export needs to be limited because there is a shortage in the supply of iron ore to the domestic steel industry," Moosa Raza, president, Indian Steel Alliance, today said at a press conference organised by industry body Assocham.The industry has also asked for a 15% reduction in the cap on iron ore export every year until the exports are brought down to zero per cent. India currently exports 90-100 million tonnes of iron ore, mostly to China.Restricting exports is a long standing demand of the steel industry which feels that iron ore needs to be preserved to meet the capacity expansion plans of the indigenous steel industry. "When the steel industry reaches a capacity of 200 million tonnes by 2020, it will need 350 million tonnes of ore. We should restrict exports to attract long term investments in the steel sector," Raza said.In the Union Budget 2007, the government had tried to address this issue by levying a duty of Rs 300 per tonne on iron ore exports. "Imposing a levy of Rs 300 per tonne will not have a significant impact on restricting exports.The government should impose a minimum levy of Rs 500 per tonne until exports are completely phased out," Raza said.Contrary to reports of a fall in exports after the imposition of export duty, Raza said iron ore exporters have witnessed a 34 per cent hike in their export proceeds in the first two and half weeks of March 2007 compared with their total exports of January and February 2007.At the conference, five major steel associations including Indian Steel Alliance, Sponge Iron Manufacturers Association, Steel Furnace Association, Association of Indian Mini Blast Furnace and All India Induction Furnace Association signed an MoU among themselves seeking restrictions on exports. The MoU has been sent to ministers concerned including the Prime Minister Manmohan Singh.
