Orissa mulls cap on iron ore output

Top iron ore producing Orissa is considering a 4% cut in its output to curb illegal mining, a government official said, reducing still further already depleted exports from the No. 4 producer.

The state government is examining a proposal from its mines department for the cut, which would be based on its estimated output of 60 million tonnes in the last fiscal year to March 2012.

"We cannot allow indiscriminate mining, over-production," said Deepak Mohanty, director of mines in the state government, adding the proposal was still being reviewed.

"Maybe the exports will be affected a little bit," he said Mohanty, when asked about the impact on exports from Orissa.

In the year to March 2011 -- the latest data available -- Orissa exported about 16.14 million tonnes, mostly to China.

India used to export about 100 million tonnes a year of iron ore -- half its production -- but clampdowns on illegal mining and the central government's desire to keep production for domestic steel mills has slashed that figure.

In Karnataka, which used to supply about 25% of India's overseas sales, a series of legal and administrative interventions have resulted in a halt to exports and severely restricted mining.