Boost iron ore output to propel India's growth: Anil Agarwal

Says hit in production of iron ore is one of the causes behind sliding rupee

India needs to boost iron ore output and invest in developing natural resources to propel its economic growth and eradicate poverty, Vedanta Resources Chief Anil Agarwal said.

The metals and mining baron, who is hopeful of restarting iron ore production in Goa soon, also said that a hit in production is one of the causes behind sliding rupee. Besides, he said the production cap on iron ore needs to be removed.

"Today the rupee has gone down. One of the reasons has been told is iron ore production is not coming up," Agarwal told PTI in an interview.

Vedanta Group firm Sesa Sterlite is the largest private sector exporter of iron ore in India, which has the seventh largest iron ore reserves in the world.

Exports of iron ore, a key steel making raw material, used to be about 100 million tonnes. It declined to 62 MT in 2011-12, 18.37 MT in 2012-13 and 14.42 MT in 2013-14 on account of a number of factors including high duties and freight rates.

On production cap, Agarwal said: "All over the world they encourage to increase the production subject to environmental approval but in India we have put in a cap but this cap should be removed and iron ore industry (should be allowed) to run."

The Supreme Court, while lifting the Goa mining ban in April, had capped production at 20 million tonnes a year.

Sesa Sterlite had 14-15 iron ore leases in Goa. Before the mining activity was stopped there, it used to produce about 14 MT of the key steel-making raw material out of a total of 40 MT produced in the state.

Agarwal maintained that India has enough potential, worth USD 400-500 billion, in natural resources like oil & gas, gold, silver, iron ore, copper, coal, calcium, rock phosphate.

He exuded confidence in restarting ore mining soon in Goa. "The state government has already reinstated everything. It is the question of few days and everybody is looking including the government. It depends on the government, how we get the approval. The moment we get the approval within 30 days it will start."

The metal scrap dealer-turned industrialist, who has seen industry-wide mining ban in Goa recently cripple his group's iron ore division, said that for a developing nation like India, it is only pertinent to capitalise the available natural resource.

It needs to be done in a most sustainable manner, by bringing in large investments and through simplification of policies and procedures, he said.

"This is the only sector that has true potential to make India an economic powerhouse," he added.