India's iron ore output is projected to grow 185 million tonnes (MT) in the next four years, a Fitch Group arm research said today.
"We forecast India's iron ore output to grow from 136 MT in 2017 to 185 MT in 2021," BMI Research, a unit of Fitch Group said in its outlook.
Bullish on India, it said the trend represents an average annual growth of 6.9 per cent during 2017-2021.
This is higher than the average contraction of 9.4 per cent y-o-y over 2012-2016 following mining bans in the three largest iron-ore producing states Goa, Odisha and Karnataka, which have since been lifted, the report said.
It said the output growth will be supported by the removal of export taxes in the Union Budget for low-grade ores and the country's Mines & Minerals (Development & Regulation) (MMDR) Act, which will streamline licensing and reopen closed mines.
"Although the MMDR Act will support ore output growth, the royalties included in the Act will limit the sector's overall growth potential," it said.
As part of India's 2016 Union Budget, export duties for iron ore lumps and fines below 58 per cent Fe content were reduced to nil from 30 per cent and 10 per cent respectively, which will significantly aid Goan shipments to recover as miners remain burdened by local levies and low prices.
This reduction was aimed at boosting shipments from the western state of Goa where the Supreme Court lifted an earlier iron ore mining ban.
Mining giant Vedanta has recently said that the worst phase for the iron ore industry in India is over and exuded confidence that its Goa arm is prepared to sustain the export momentum amidst softening global prices and subdued demand.
Goa produces low grade iron ore (Fe content below 58 per cent), which is exported to China. After removal of the mining ban by the Supreme Court in 2014, the state is allowed to mine 20 million tonnes (MT), with the highest share of 5.5 MT going to the Anil Agarwal led-firm.
Country's single largest iron ore producer, NMDC which with an annual 30 MT output has recently hiked ore prices.
Disclaimer: No Business Standard Journalist was involved in creation of this content
