Orissa, the country's biggest iron ore producer, has sought an immediate ban on exports of the mineral ore, saying such a move would bring down prices of ore and help regulate mining activities.
The state Chief Minister Naveen Patnaik has reiterated his demand for ban on iron ore exports, seeking intervention of Prime Minister Manmohan Singh on the matter.
Patnaik had earlier urged the Prime Minister to announce a ban on iron ore exports and had also raised this demand at the meeting of the National Development Council (NDC) held on October 22.
“The boom in iron ore prices in the last decade has created perverse incentives for mining activities to be carried out in an unregulated manner. A ban on the export of iron ore should be immediately imposed. This will not only bring down domestic prices of iron ore but also encourage local industries to invest in technologies to utilize the iron ore prices presently being exported, besides ensuring that mining activities are regulated and sustainable,” Patnaik said in his letter to the Prime Minister.
The ban on iron ore exports is necessary as the demand for steel and its production in the country are both expected to grow at an annual rate of 10 per cent or more on an average in the coming years, he said.
Patnaik has underscored the need for having a long-term strategy for conservation of the finite iron ore resources to meet the future requirements of the country.
Besides pitching for a ban on iron ore exports, Patnaik has yet again demanded the imposition of a Mineral Resource Rent Tax on iron ore to be charged at 50 per cent of the surplus rent on account of the super normal profits being made by private mine owners.
“I understand that the Economic Advisory Council (EAC) has been asked to examine the issue. I do hope that the EAC has completed the exercise and given its views to your office. In case any further information is required from the state government, we will be happy to provide the same. I would like to reiterate that the present fiscal and regulatory framework for iron ore is resulting in the unjust and vast enrichment of a few mine owners without commensurate benefits to the community at large,” Patnaik wrote in his letter to the Prime Minister.
