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Steel firms sell surplus ore

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Aravind Gowda Bangalore
Indian steel companies are selling surplus iron ore in the domestic market even as they seek a ban on iron ore exports citing shortage of raw materials.
 
In April, the state-run Steel Authority of India (SAIL) invited tenders to dispose of 25,000 metric tonnes of high grade iron ore fines from its Visvesvaraya Iron & Steel (VISL) plant in Karnataka. Similarly, Tata Metaliks invited tenders in the same month to sell 10,000 tonnes of iron ore fines in the open market.
 
The Federation of Indian Mineral Industries (FIMI) has strongly objected to this. "The steel companies' stand is contradictory. They are opposing iron ore exports, but at the same time are selling the iron ore stock, which will easily find its way to the export market. The steel firms have no locus standi in seeking curbs on exports without first utilising their surplus stock of iron ore," FIMI Secretary-General R K Sharma said.
 
The FIMI had apprised the Centre of the steel companies' contradictory actions. "A number of other steel companies are also selling iron ore in the domestic market, indirectly contributing towards export. In fact, the Jharkhand government has objected to such sales," he said.
 
Various government records show that some steel companies have excess iron ore stock. For instance, the Comptroller and Auditor General (CAG) of India has rapped SAIL for incurring losses by accumulating surplus iron ore fines.
 
The CAG, in its 2005 report, said: "The sale and dispatch of iron ore fines from Gua mines has been very poor. Out of the average production of 1.78 million metric tonnes per annum during the last five years (2000-01 to 2004-05), only 0.71 million metric tonnes (40 per cent) was dispatched. The balance of 1.07 million metric tonne was being added every year to the accumulated stock, which reached 35.04 million metric tonnes. The non-disposal of iron ore fines has resulted in the non-realisation of revenue of Rs 1,507 crore."
 
The FIMI has been contending that India has adequate iron ore resources for both domestic steel production and export. Last financial year, India exported 90 million tonnes while production was around 160 million tonnes. Of the 90 million tonnes exported, 74 per cent was iron ore fines, which do not have buyers in the domestic market. Bowing to pressure from the steel industry, the government imposed a duty (Rs 300 per tonne) on iron ore export.

 
 

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First Published: Jun 11 2007 | 12:00 AM IST

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