Flagging concerns on the rising trend in iron ore
exports, pellet manufacturers have called for a total ban on exports of high grade iron ore
fines from the country in the interest of the local steel industry. They feel high grade iron ore
is a scarce resource that needs to be conserved for value addition.
who are forced to operate at depleted capacity, are also pitching for 30 per cent export tax on lower grade fines (iron content of 45 to 58 per cent). The Union government has exempted export duty for low grade iron ore
fines (iron content below 58 per cent) while continuing with the 30 per cent duty on high grade iron ore.
Federation of Indian Mineral Industries
(Fimi) has been lobbying for a cut in export duty on higher grade iron ore.
To study the possibility of rationalisation in export duty, the Union mines ministry has formed a committee.
is national wealth and needs to be preserved for the future especially when the country is eyeing 300 million tonnes steel capacity (by 2030-31). If there is glut of low grade iron ore
fines, the same can be made available to pellet plants at a nominal cost. We feel that the cut off for export duty should be iron ore
fines with 45 per cent instead of 58 per cent grade iron ore”, said Deepak Bhatnagar, secretary general with the Pellet Manufacturers Association of India
Justifying the export duty demand for 45-58 per cent grade fines, he said, Institute for Minerals and Materials Technology (IMMT), Bhubaneswar is working on new technology that can beneficiate even 45 per cent grade iron ore
Leading steel and pellet manufacturer Jindal Steel
& Power Ltd (JSPL) feels ban on high grade iron ore
fines exports would increase its availability in the domestic market as such ore is in high demand by steel units.
Manish Kharbanda, executive director & group head (corporate affairs), JSPL said, “In any case, exports on raw material should never be encouraged since the value to the same resource can be increased exponentially by value addition which does not cost as much. Even smaller countries in Africa do not allow export of raw material like iron ore
and have laws which encourage industrialization and export of finished products.”
Unlike top iron ore
exporting nations like Australia
and Brazil, India has a large steel making capacity that needs to be backed by ample iron ore
supplies. India is the third largest steel producer with a rated capacity of 125 million tonnes (mt). Actual steel output in the country in FY17 was 97.4 mt, consuming 155.78 mt of iron ore
against a total ore production of 190 mt. The country's iron ore
exports jumped four fold to 24.35 mt in FY17 on strong global prices.
By 2030-31 when the country targets steel capacity of 300 mt, iron ore
requirement is projected to climb to 437 mt.
The domestic pellet industry tasked with value addition has a capacity of 85 mt created with an investment of Rs 40,000 crore. However, actual output was only 48.5 mt in last fiscal.
“Capacity utilisation (of pellet plants) can be significantly increased if the raw material is available at competitive price. Domestic market is oversupplied with lump and pellet since the steel makers are not able to produce at their installed capacity for multifaceted reasons including the market challenges. Export of pellets should help the pellet manufacturers to stabilize their operation, attain rated capacity and thus reduce per tonne cost of manufacturing”, Kharbanda said.