Iron ore export may be put under quotas, canalised

Reacting to the demands of the steel industry, the government is examining options to regulate iron ore exports.

The options include country-wise quotas and canalisation through state-owned enterprises. This was discussed on Thursday by the inter-ministerial committee set up by the Prime Minister's Office on iron ore exports .

"No decision has been taken so far. The committee has been asked to submit its report within two weeks," a government official said.

The recommendations of the committee are expected to be included in the amendments to the Mines and Minerals (Development and Regulation) Act 1957, which is likely to be tabled in the forthcoming winter session of Parliament.

However, another official who attended the meeting said there was not much support for export quotas. "Any form of quota is always followed by pressure to upwardly revise limits once it has been reached," the official said.

He further said that the committee was examining if the option of canalisation through state-owned bodies would be compatible with existing World Trade Organisation norms.

The inter-ministerial committee, at its meeting last month, had circulated several policy options for comment, which included restriction on exports of iron ore with ferrous content of 64 per cent and above (both fines and lumps) and incentives for beneficiation of low grade iron ore. Another proposal sought to maintain exports at current levels for the next three years, after which it would be reviewed.

Chaired by the secretary of mines, the committee consists of officials from the ministries of steel and commerce, the Department of Industrial Policy & Promotion and the Planning Commission.

The group was formed by the PMO after Jindal Steel and Power Vice-Chairman and Managing Director and Lok Sabha member Naveen Jindal wrote to Prime Minister Manmohan Singh calling for a ban on export of iron ore.

Of the 165 million tonnes of iron ore that was mined in 2005-06, almost 90 million tonnes found its way to the export market "" mostly headed to China "" while the remaining 75 million tonnes was consumed domestically.

Fuelled by China's galloping demand, exports of iron ore from India has been growing steadily from just 37.49 million tonnes in 2000-01. 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.