Govt keen to start iron ore mining, exports

Before the ban, India was exporting iron ore worth over $7 billion but shipments plunged to 18.37 MT in 2012-13

The government is keen on starting iron ore mining and exports, which face a Supreme Court ban, and will soon take up the matter, Commerce and Industry Minister Anand Sharma said today.

His remarks follow Finance Minister P Chidambaram's comment last week that the Mines Ministry had or would move the apex court seeking relaxation in some of the orders passed on iron ore mining in Goa and Karnataka.

Before the ban, India was exporting iron ore worth over USD 7 billion, making it the third-largest exporter in the world. But after the 2011 Supreme Court ban on exports of most categories, shipments plunged to 18.37 million tonnes in 2012-13 from 117.4 million tonnes in 2009-2010.

"Yes, we will take it up because we do not want this ban to continue because all the mining activity as such is not illegal...We want to start it. The fact of the matter is we have huge exportable surplus," Sharma said here after the meeting of Board of Trade.

He said that mining is an important industrial activity and India has huge exportable surplus even after meeting the demands of the domestic industry.

He also said that mining create employment for large number of people.

"When economic hardship is there we cannot make poor people in difficult backward regions unemployable or take away their sustenance. So that should be restored," he added.

 He also said that exports will help in fetching substantial foreign exchange "which this country does need and therefore we will be moving in that direction".

"We are very clear in our mind both me and the finance minister. The necessary steps will be taken," he said.

The Supreme Court ban came in the wake of the Karnataka Lokayukta report about irregularities in the sector and was extended to Goa, effectively stopping exports from that state too, based on a report by its Central Empowered Committee.

The government is also considering to reduce exports duty on iron ore. Currently, the duty is 30 per cent on both varieties -- lumps and fines. Last month, Prime Minister Manmohan Singh had made a case for increasing exports of iron and other ores.

Sharma said that India's iron ore mining is about 200-225 million tonnes and consumption is only 95 million tonnes.

"So exportable surplus is always there particularly with iron ore fines which we were exporting in huge quantities. Palatisation capacity in India is still limited.

"Indian steel industry is developing and evolving bit overnight you cannot increase your capacity from 85 million tonnes to 200 million tonnes. It will take time..What is mined have to be exported or has to be consumed because it is environmentally hazardous," he said.