 "Iron ore exports from Odisha plunge 57% in FY13")
Data from the state directorate of mines shows quantity of iron ore exported from Odisha in FY 13 is the lowest since 2005-06. The iron ore exports from the state had been rising consistently since 2005-06, riding on the metal boom, peaking at 20.05 mt in 2007-08. But since then, it is on the slide, reaching 16.35 mt in 2008-09 and dropping further to 10.01 mt in 2011-12.
Going by the estimates of Federation of Indian Mineral Industries (FIMI) that has projected iron ore exports from the country at 18 mt for FY 13, Odisha’s share in the total export basket comes to nearly 25 per cent.
Analysts believe export of the key raw material for steel making from Odisha may trickle down to negligible level in 2013-14 amid hostile regulatory environment, high export tax and freight costs and not so encouraging price scenario in the international market.
“Whatever exports of iron ore have taken place from Karnataka and Goa in FY13 is possibly before the imposition of restrictions. Ore exports in FY 13 would have been largely from Odisha, but exports are likely to trickle to negligible level in FY14. Exporters have been hit hard by steep export duty of 30 per cent and also due to high transport cost. Besides, exports of the ore are no longer remunerative owing to price correction in the global market. India that accounted for nearly 17 per cent of China's total volume of iron ore imports in FY09, has seen erosion of this share to less than two per cent in FY13,” said Rajesh Zawar, research analyst (institutional equity) at AnandRathi, a Mumbai-based financial services firm.
Along with a steep export duty of 30 per cent on iron ore lumps and fines and prohibitive freight costs, a stiffer regulatory norm of the state government, making it mandatory for standalone lessees to sell at least 50 per cent of their produce to state based industries, has proved to be a dampener.
Mine lessees feel clampdown on ore exports is no solution when the local demand is not adequate to absorb even 50 per cent of the output.
“Even if all state based industries are supplied iron ore, their total requirement comes to nearly 20 million tonne. Consumption of iron ore mined in Odisha by other states is also around 20 million tonne. This still leaves an exportable surplus of more than 20 million tonne considering the state's annual production level of 60-65 million tonne. Conserving 50 per cent iron ore for the local industries will only lead to a glut in the domestic market where fines will get stacked,” said a highly placed official of a standalone miner.
As per provisional figures of the state directorate of mining, iron ore production in 2012-13 stood at 62.4 mt, only 5.56 per cent less than 66.08 mt achieved in 2011-12. Production of the ore which touched its highest ever level of 79.67 mt in 2009-10 has been on a decline since then.