No iron ore export likely in FY14; some import possible

Global prices, high export duty blamed for situation; country may become net importer if port-based mills use foreign ore for their blast furnaces

India might become a net importer of iron ore this year. Port-based steel mills are preparing to use imported ore for their blast furnaces.

The country witnessed its lowest ever ore export in 2012-13, estimated at close to 18 million tonnes (mt), a decline of 69 per cent over the previous year. India exported 61.8 mt in 2011-12. The Federation of Indian Mineral Industries (Fimi) says export was 16.3 mt between April 2012 and January 2013, a decline of 68 per cent compared to the corresponding period in the previous year.

“Given the current price scenario in the international market, we do not foresee any possibility of iron ore export from India,” said R K Sharma, secretary general, Fimi. “In addition, the 30 per cent export duty on ore and differential freight rate imposed by the railways do not encourage us to export.”

He said currently there was no production in Goa and hardly any in Karnataka. The continued restriction in Odisha also did not allow miners to think of exports. “Both federal and state governments joined together to kill a flourishing industry, which had employed one million people,” said Sharma.

Echoing his sentiments, H Noor Ahmed, chairman of Mineral Steel & Power Pvt Ltd, said there was no alternative for miners in the absence of exports. “The industry is not thinking of any alternatives at this moment because there is hardly any production in the mineral states of Goa and Karnataka. The production of iron ore in Karnataka is not even sufficient to feed the steel mills (in the state).”

JSW Steel has already announced plans to import about five mt of ore from Australia and South America for its port-based steel plants in Dolvi and Salem this year. Essar Steel is also considering importing  ore.

“It is not feasible to import iron ore for a non-port based steel plant. In our estimate, about 5-10 million tonnes of iron ore could be imported by steel mills during the current financial year,” said Ritesh Shah, lead analyst for brokerage firm Espirito Santo.

He said there could be some export from Goa in the second half of the year, with some stocks in the ports and mines. However, there was no possibility of export from Karnataka and Odisha.

Meanwhile, all eyes are on the Supreme Court’s verdict, likely tomorrow, on the opening of Category-B mines in Karnataka.