Disposal of ore fines worries mine owners

With the iron ore exports expected to decline by 30 per cent during 2007-08 on account of the duty on overseas sales, the mining industry is worried over the disposal of iron ore fines, which account for close to 75 per cent of the exports.

Iron ore fines, generated in the natural course of mining, are considered as environmental hazards, as they contribute towards the deterioration of air and water quality. During the last financial year, India exported 92 million tonnes of iron ore, including all grades of fines. Though the government has reduced the export tax on low grade iron ore fines (containing less than 62 per cent of ferrous a tonne) from Rs 300 a tonne to Rs 50 a tonne, the mining industry claims that this will not significantly boost exports since low grades constitute only 25 per cent of overseas sales.

"For every tonne of lump iron ore mined, 2.5 tonnes of iron ore fines will be generated. They can be stocked for only a brief period. If the stocks are not disposed of within a year, there could be serious consequences. Under the prevailing circumstances, the mine owners have no choice but to stock the fines and hope that the international demand picks up in the next three months, despite the export duty," S B Chauhan, advisor to the Federation of Indian Mineral Industries told Business Standard.

The worst hit are the mines located in the western sector. "Unlike the eastern sector where iron ore is hard, in the western sector we have to mine 1 million tonnes to extract 2 lakh tonnes of iron ore lumps. The remaining 8 lakh tonnes are fines," said Shrenik N Baldota, executive director, Minerals Sales, the second largest iron ore exporter from the private sector.

"In the absence of an overseas market for fines (courtesy the export tax), stocking them is a big problem due to paucity of space. So mine owners have to invariably scale down production. Some smaller mines may not even sustain such operations," Baldota added.

Fines are also generated when lumps are crushed to 5-18 mm for supplying calibrated ore to the domestic sponge and pig iron plants. Moreover, fines are generated during loading, unloading and handling of iron ore at railway stations and ports. Over 70 per cent of the total iron ore produced in the country is accounted for by fines.

Stocked iron ore fines may enter the rivers and streams during the rainy season leading to water pollution. It also settles on agricultural fields, resulting in a loss of productivity.