Ministerial group moots curbs on iron ore exports

The inter-ministerial group on iron ore exports constituted by the Prime Minister's Office has submitted a draft policy that calls for restrictions on iron ore exports and recommends that exports be maintained at current levels for the next three years, which could well become legislation by the year end.

If these recommendations find their way to the Mines and Minerals (Development and Regulation) Act 1957 that is expected to be amended in the Winter Session of Parliament, this could pave the way for India's iron ore resources to be utilised for various new proposed steel making capacities that are in the pipeline.

Of the 165 million tonne of iron ore that was mined in 2005-06, 90 million tonne found their way to the export market - mostly headed to China - while the remaining 75 million tonne was used for domestic consumption.

Fuelled by China's galloping demand, domestic exports of iron ore have been steadily growing, which in 2000-01 was just 37.49 million tonnes. China produced 126.3 million tonnes of steel in 2000 which vaulted to 349.1 million tonnes last year and is expected to top the 400 million tonne mark this year.

Apart from asking for restriction on exports of iron ore with an Fe content of above 64 per cent and above (both fines and lumps), at current level to be maintained for the next three years after which the policy will be reviewed, the inter-ministerial group has called for a review of all existing long term agreements on iron ore supply at the time of renewal.