Mittal opposes iron ore exports

LN Mittal has thrown his weight behind the steel lobby's demand for a ban on export of iron ore.

Official sources told Business Standard that Mittal had voiced concerns over the increasing volume of high-grade iron ore exports from the country to Minister of Steel Ram Vilas Paswan when the two met in London last week. Paswan was leading an industry delegation to Europe on a hunt for technology.

Mittal suggested to Paswan that India should gradually cut down on iron ore exports and instead focus on adding value to the ore by converting it into finished steel products. The steel magnate wants to set up a 12-million-tonne steel plant in India with an investment of Rs 40,000-45,000 crore.

While India manufactured 38.1 million tonnes of steel in 2005, it exported 89 million tonnes of iron ore, of which about 75 million tonnes went to China.

The communist country produced 349 million tonnes of steel in that period.

While the steel industry wants a complete ban on iron ore exports, the mining industry is demanding that all restrictions on ore export be lifted.

After the Hooda Committee recommended that export of iron ore be continued with a duty on the ore in lump form having Fe content above 65 per cent, the Indian Steel Alliance wrote to the Prime Minister's Office calling for a ban on exports.

Later, Jindal Steel and Power Vice-Chairman and Managing Director and Lok Sabha member Naveen Jindal wrote to Prime Minister Manmohan Singh calling for such a ban, arguing that iron ore being a limited resource should not be exported indiscriminately.

Consequently, the PMO constituted an inter-ministerial group, with representation from the Ministry of Steel, department of industrial policy and promotion, the department of economic affairs and the Ministry of Commerce, and the mines secretary as its convener.

The recommendations of the Hooda Committee are expected to be tabled in the winter session of Parliament, with the Ministry of Mines hammering it into its final shape.