Painting a bleak picture, the Steel Ministry today said iron ore exports will be under pressure and overall growth of the industry may be affected due to global competition and market forces over the next five years.
It is not government policy but market forces that will result in a decline in iron ore exports from the country, which are currently pegged at 120 million tonne, Ministry of Steel Economic Research Unit (ERU) Chief Economist AS Firoz said.
"It (iron ore export) would decline to 30-40 million tonne by 2016," Firoz told a conference on 'International Iron Ore and Steel-Making Raw Materials' organised by Ore Team, an international research firm with representatives from countries such as China and Indonesia.
Firoz said the steel and raw material industry was passing through a tough phase and new ideas are required to steer it ahead.
"Global economies are not doing well. The Chinese economy will also come under pressure, resulting in the reduced demand of iron ore, as it will also affect growth of the steel industry," he said.
Goa is the largest exporter of iron ore in the country. A total of 54 million tonne of ore was exported from Goa last fiscal, mostly to countries such as China, Japan and Australia.
The official claimed that "even if there is a demand, the exports would be an unviable proposition, considering the infrastructural costs. If the price is $100 (per tonne of iron ore), most of the mining companies could able to achieve only a break-even," he said, adding that taking into consideration current road and railway freight charges, nobody would be making money.