Steel industry seeks cap on export of iron ore

The steel industry today demanded that the government place a quantitative restriction on iron ore export at 90 million tonnes for the current year, in a move to keep more raw material at home.

"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, said at a press conference organised by industry body Assocham.

The industry has also asked for a 15 per cent reduction in the cap on iron ore export every year until the exports are brought down to zero per cent. India currently exports close to 100 million tonne 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 sector.

"When the steel industry reaches a capacity of 200 million tonnes by 2020, it will need 350 million tonne ore. We should restrict exports to attract long-term investments in the steel sector," Raza said.

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. It should impose a minimum levy of Rs 500 per tonne until exports are completely phased out," Raza said.